China Admits Foreigners Hurt By Anti-Trust Law

BEIJING (AP) -- China acknowledged Thursday that only foreign companies have been forced to scrap or change business deals under its two-year-old anti-monopoly law but rejected complaints the measure is discriminatory.

Regulators have examined 140 cases and rejected outright only one, Coca-Cola Co.'s 2008 bid to buy Chinese fruit juice maker Huiyuan, said Shang Ming, chief of the Commerce Ministry's anti-monopoly bureau. He said five other deals, all involving foreign companies, were passed with conditions such as selling off some assets.

Business groups complain Beijing is using the law and other regulatory measures to shield its companies from competition in violation of free-trade pledges. Companies say conditions for them are worsening as the communist government tries to build up its own industry leaders.

"People who say we are discriminating against foreign companies do not understand the situation," Shang said at a news conference. "After the financial crisis, mergers and acquisitions were very active, and most are done by foreign companies."

The government said in March 2009 it rejected the Coca Cola-Huiyuan tie-up because their market share would be too big and would stifle competition. But industry observers said Beijing appeared to be trying to prevent one of China's few successful brands from falling into foreign hands.

The American Chamber of Commerce in China and other business groups note that regulators have yet to pursue major state-owned companies under the law, even though most are monopolies or have market shares well above the legal limit.

In another major acquisition, Beijing allowed Belgium-based InBev SA to take over Anheuser-Busch Cos. Inc.'s Chinese operations in 2008 as part of a global merger but limited future acquisitions by the combined company.