China's head-spinning series of announcements about investigations into foreign makers of baby formula, pharmaceuticals and food packaging is anything but a coincidence, according to several observers who claim that China is using the inquiries to boost domestic companies in the face of a serious financial slowdown.
"It's too concerted," said Daniel Gouré, vice president of the Lexington Institute, a public policy research organization, about the probes, which have rocked foreign companies in those sectors. "Where you have that much smoke, there ought to be a fire," he added.
"They definitely want to bolster the domestic side," said Gouré, a national security analyst who also sees the Chinese actions as an effort to divert attention to still unresolved scandals by their domestic manufacturers in some of the same sectors even as foreign companies rack up big gains in those areas.
"I think the Chinese are being smart, saying 'If you've got a stain on you, then throw mud on someone else,' " said Gouré, who does not believe the investigations have a good-faith basis.
Last week, China said it would look into price-fixing by foreign baby-formula companies, including Mead Johnson Nutrition, Nestlé's Wyeth division, Abbott Laboratories and Danone. Chinese regulators also revealed their examination of prices set by 60 foreign and domestic drugmakers, as well as an investigation into Swiss food-packaging behemoth Tetra Pak of allegedly "abusing its market dominance."
On Thursday, Chinese authorities accused executives of giant GlaxoSmithKline of an ongoing effort to bribe doctors to prescribe GSK drugs.