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.
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."
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: 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?
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...
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: 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.
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.
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.
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?
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.
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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