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China Investigates Qualcomm

11/25/2013 03:16 PM EST
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junko.yoshida
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Pursued by Chinese government
junko.yoshida   11/25/2013 5:23:14 PM
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I still don't get it...why China appears so intent on getting multinationals in recent months. Politically motivated? I am sure that's part of it. But it doesn't seem to do much good either for Chinese companies who need to work with multinationals or those who compete with multinationals.

rick merritt
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rick merritt   11/25/2013 8:04:35 PM
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I speculate this is part of a government crackdown on corruption, pointing the finger at non China multinationals rather than the internal bureaucrats who may have been encouraging bribes in the first place.

Like the movie classic Casablanca when the prefect of police closes Rick's Cafe because he has found gambling and says he is "Shocked, shocked..." Then his underling comes over and says "Here are your winnings, Monsieur Prefect."

junko.yoshida
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Re: Pursued by Chinese government
junko.yoshida   11/26/2013 1:52:16 AM
Ahh, good one, Rick. So, in this case, foreign multinationals are like Rick in Casablanca!

Captain Renault: What in heaven's name brought you to China?

Rick: My health. I came to China for fortunes.

Captain Renault: The fortunes? What fortunes? We're in the poor economy.

Rick: I was misinformed.

Pi3P1415926
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Re: Pursued by Chinese government
Pi3P1415926   11/25/2013 9:05:03 PM
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New boss is in the office.  Mr.Xi is the new president of China.

wave.forest
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Re: Pursued by Chinese government
wave.forest   11/26/2013 8:32:37 AM
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I agree that it is politically motivated to retaliate US investigation against Huawei and ZTE. Why now? I reckon China now is open enough and it does not rely on these big companies for technoloy any more. By squeezing them out of the Chinese market, it will help the domestic companies.

In short, these big companies are not as welcome as before.

junko.yoshida
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Re: Pursued by Chinese government
junko.yoshida   11/27/2013 12:29:28 PM
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@wave.forest, you wrote:

In short, these big companies are not as welcome as before.

I think it sums it up. Well put.

docdivakar
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Re: Pursued by Chinese government
docdivakar   11/27/2013 1:03:32 PM
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@Junko: seems to me that both sides (China vs. Multinationals) are evolving & perhaps maturing with the process of "Geopolitics" and its implications to doing business. The very recent USAF flights over China's self-claimed defensive air corridor (over Senkaku islands) may elicit NDRC's scrutiny over more multinationals?

MP Divakar

junko.yoshida
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Re: Pursued by Chinese government
junko.yoshida   11/27/2013 4:08:13 PM
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@docdivakar, I agree. I don't doubt that. I am sure that Qualcomm won't be the last to be investigated, either.

 

junko.yoshida
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Re: Pursued by Chinese government
junko.yoshida   11/27/2013 4:11:37 PM
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While geopolitics is one of the powerful tools nations can use to play to their advantages, it strikes me that it's rather short-sighted. After all, there are still a number of areas where different companies can work together to each of their advatnage...

SR656601
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Re: Pursued by Chinese government
SR656601   11/26/2013 11:59:16 AM
Well, here's what I think. If by the use of the word, "attack" there is an implicit assumption that these multinational companies are innocent and China govt. is the bad guy, then I disagree with this assumption. Put yourself in an Asian govt. shoes, see what havoc is wreaked by multinational companies on domesitc environment, and domestic economic situation. These multinational companies use Asian markets as dumping grounds for everything, cheap products, experimental pricing, throwaway pricing, pollution, disregard for human labor conditions etc. So I wouldn't jump too quickly to the conclusion, "Oh, China is doing all these bad things to the good U.S. / international companies, look how bad China is." Remember, big multinational companies try to get away with anything, until they can't.

SR

 

docdivakar
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Re: Pursued by Chinese government
docdivakar   11/26/2013 5:50:14 PM
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@SR: good point. There are many examples to "big multinational companies try to get away with anything, until they can't..." in many countries in Asia. Many pesticides and chemicals banned in the US are still in use in many Asian countries! So I wouldn't treat multinational companies as "holier than thou" when it comes to matters like these with Qualcomm & NDRC of China.

In the best interest of all sides concerned, I think it makes good sense for NDRC to make public the "confidential" relating to Qualcomm so other businesses can make better business decisions while operating in China.

MP Divakar

junko.yoshida
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Re: Pursued by Chinese government
junko.yoshida   11/28/2013 12:41:39 AM
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Of course, pitting multimationals against chinese companies, and paiting the conflict in good vs. evil is never a recipe for finding real solutions.

But then again, where is the real problem here?

We need to know more about what exactly Chinese agency is looking into Qualcomm for.

lilzz
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Re: Pursued by Chinese government
lilzz   11/30/2013 2:21:22 PM
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Junko,  You should know the answer.  Any company making alot from a host country yet give back nothing is asking for trouble.  Very Simple. 

krisi
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Re: Pursued by Chinese government
krisi   12/2/2013 4:36:09 PM
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Does Qualcomm has a design center in China?

lilzz_lilzz
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Re: Pursued by Chinese government
lilzz_lilzz   11/29/2013 4:45:41 AM
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Qualcomm is making too much money in China, 49% of its revenue is from China which amount to $12.3Billion.  All Qualcomm's design are done outside of China and so is its manufacturing, which mostly done in Taiwan. 

From Chinese government's view, this is UNacceptable, making so much from China yet contributes nothing.

Like Intel, at least it setup a 8 inch chipset fab in Dalian, well that's at least some contribution to China.

Like Samsung, setup a major flash fab in Xian, that's contribution to China.

I bet the next target would be Broadcom. Same as QUalcomm, all design and manufacturing done outside of China.  

All those companies making tons of money from China yet contribute nothing back will surely be targeted.

Kinnar
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Good for other countries
Kinnar   11/26/2013 6:03:16 AM
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If China will continue this sort of steps then the multinationals will be encouraged to find some other place for hosting their manufacturing units. This might create opportunity for other developing countries. 

Curmudguy
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China Investigates Qualcomm
Curmudguy   11/26/2013 7:56:23 AM
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Is China finally saying that they can live w/o the multinational companies?  That they already have THE tehnologies and that there is no need for more?  Like the "flywheel" they believe they have already achieved the momentum required to make thier own homegrown technology?

 

docdivakar
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Re: China Investigates Qualcomm
docdivakar   11/27/2013 10:57:25 AM
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Here is a link to the story on this topic at BBC:

http://www.bbc.co.uk/news/technology-25084078

The article makes an interesting quote by an analyst: "We suspect this investigation is related to the forthcoming launch of TD-LTE by China Mobile... and the negotiations on chip pricing and license pricing between Qualcomm and Chinese-based handset [manufacturers] that are likely occurring right now," said Travis McCourt an analyst with Raymond James & Associates.

MP Divakar

junko.yoshida
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Re: China Investigates Qualcomm
junko.yoshida   11/27/2013 12:26:40 PM
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@docdivakar, that's as good speculation as any.

Considering the recent move to consolidate Spreadtrum/RDA Micro under the one roof of Tsuinghua Unigroup (hence strengthening the position of China-born baseband/app processor company), going after Qualcomm -- for whatever charge that it can stick to it -- might make sense from the Chinese point of view.

 

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