China's recent anti-monopoly law enforcement may be less about targeting foreign companies than it is about combating a potential threat to social order: income inequality.
"Many foreign companies, by virtue of having strong brand positions, can add additional margins," Ben Cavender, an analyst at China Market Research Group, said. "They're sending a signal to firms that they can't get too greedy," he added.
"They're worried about wealth inequality," he said, noting that in the wake of the mainland's economic slowdown, many wealthy individuals are continuing to benefit even as average consumers struggle.
China's gini coefficient, an indicator of the concentration of wealth in a society, is around 0.55, indicating a "severe" gap between rich and poor, compared with 0.45 in the U.S. and 0.30 in China in 1980, according to researchers at the University of Michigan. The scale ranges from zero to one, with zero indicating complete equality. The U.N. calls levels above 0.4 a predictor of social unrest.