Beijing regulators are making an example out of GlaxoSmithKline (GSK) （London: GSK) by accusing the British drug giant of massive bribery related to its aggressive sales tactics, spotlighting one of the major risks that foreign firms face when doing business in China.
While many of the allegations against GSK may well be true, the timing and high-profile nature of the probe against such a well-known and trusted western name look like a warning to all drug companies to stop this kind of behavior as China overhauls its healthcare system. Unfortunately for GSK, the company’s reputation and business in China will be severely damaged by the scandal. Many employees have already been fired since the scandal began, and some could even end up in jail for practices that are quite common not only in China but also in many western countries. Read Full Post…
China has embarked on a recent campaign to clean up its drug sector of aggressive selling tactics that often include bribing doctors and hospital officials to boost sales. The choice of the drug firms looks smart, as it takes aim at a rapidly transforming Chinese medical sector where many business practices are still in their formative stages. More broadly speaking, this kind of campaign also sends a strong signal that Beijing won’t tolerate the kind of bribery and other aggressive and often unethical business practices that have become far too common in many Chinese industries. Read Full Post…
US-listed drug maker Simcere Pharmaceutical (NYSE: SCR) must be eagerly looking forward to completing its pending privatization, following the release of its latest quarterly results that show the fast-growing Chinese healthcare market is suddenly losing some of its luster. Simcere is just the latest drug maker to encounter headwinds in China, where fierce competition and strict government oversight are suddenly giving both domestic and foreign drug makers a major headache. Many of those companies were hoping to make big bucks as China rolled out a new national healthcare network to replace its old system where everyone got medical care through their state-run work units. But Beijing is pushing back by showing it aims to get maximum value for its money, and also that it won’t tolerate aggressive sales tactics practiced by many companies. Read Full Post…
Beijing is returning to a time-tested tactic from its PR playbook with a sudden flurry of high-profile probes of major multinationals, which are being accused of everything from price manipulation to bribery. This latest series of “scandals” has snared some of the most active foreign firms in China, including pharmaceutical giant GlaxoSmithKline, milk powder maker Mead Johnson and packaging products titan Tetra Pak. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 31. To view a full article or story, click on the link next to the headline.
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Apple (Nasdaq: AAPL) CEO Cook Visits China Telcos As iPhone Sales Drop (Chinese article)
Sina (Nasdaq: SINA) Weibo, Alibaba to Launch Social E-Commerce Platform (English article)
Suntech (NYSE: STP) Adds 2 New Board Members (PRNewswire)
Glaxo (London: GSK) Sacks 100 Chinese Sales Reps in Bribery Case (English article)
Huace Film (Shenzhen: 300133) To Buy Croton Media for 1.65 Bln Yuan (English article)
As if its China troubles weren’t bad enough following a weak earnings report, global tech giant Apple (Nasdaq: AAPL) is now coming under political fire from central bureaucrats in Beijing for failing to deliver promised donations after an earthquake earlier this year. Frankly speaking, I don’t have a lot of sympathy for Apple or any of the other firms that get this kind of criticism, since I find their quickness to announce donations after any major disaster somewhat insincere and largely a publicity ploy. But the fact that yet another foreign firm is coming under attack from central government sources this month certainly adds to my previous assertions that Beijing has recently embarked on a drive to discredit foreign firms and divert attention from other domestic problems. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 23. To view a full article or story, click on the link next to the headline.
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KFC (NYSE: YUM) Ice Cubes Found Dirtier Than Toilet Water (English article)
Glaxo (London: GSK) Says Executives Appear To Have Broken Chinese Law (English article)
TAL Education (NYSE: XRS) Announces Unaudited Fiscal Q1 Results (PRNewswire)
The following press releases and media reports about Chinese companies were carried on July 20-22. To view a full article or story, click on the link next to the headline.
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Yahoo (Nasdaq: YHOO) To Reacquire China Yahoo From Alibaba – Source (English article)
SPD (Shanghai: 600000), China Mobile (HKEx: 941) In E-Payments Tie-Up (Chinese article)
The following press releases and media reports about Chinese companies were carried on July 18. To view a full article or story, click on the link next to the headline.
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China Blocks GSK (London: GSK) Finance Head From Leaving Country (English article)
I don’t usually consider myself paranoid, but the rapid acceleration in Beijing-led probes against foreign firms seems to be hinting at a wave of growing anti-foreign sentiment that could bode poorly for multinationals in China in the months ahead. That’s my assessment following news of the latest probe against European drug giant GlaxoSmithKline (London: GSK) for allegedly giving out bribes. Such periodic waves of backlash against foreign firms used to be common in China, and usually followed periods of openness and rapid expansion. In this case, I suspect this latest crackdown could also be designed to divert attention from China’s sudden economic slowdown, which has left many average Chinese suddenly feeling uneasy about the future. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 13-15. To view a full article or story, click on the link next to the headline.
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Glaxo (London: GSK) Executives Admit to Bribery, Tax Crimes, China Says (English article)
Qihoo 360 (NYSE: QIHU) In Final Talks To acquires Sogou For $1.4 Bln (English article)
Spreadtrum (Nasdaq: SPRD) Agrees To Be Acquired by Tsinghua Unigroup (PRNewswire)
