This editorial should send chills down the spine of every foreign company in China

• Jul. 7, 2015

 

In China, the media most often speaks for the state.

So when Xinhua publishes an editorial telling foreign companies to "put their victim mentality to rest ... and embrace new rules" on national security that expand China's legal reach "to almost every aspect of public life," you can bet this is coming straight from the top.

Here's some more:

"For decades, foreign investors have reaped handsome profits from one of the world's fastest-growing economies while sitting on cheap labor, generous consumers, and a 'super national treatment' that includes hefty and exclusive tax breaks," it said.

"These have prompted many to feel entitled to favorable policies while on Chinese soil, and to play the victim card in order to continue to press for advantageous accommodations in the face of rising labor costs and when authorities try to treat them as the equals of domestic firms."

The editorial, which appeared in Xinhua on Tuesday morning, is most likely a response to recent Chinese legislation that has upset many in the technology sector. The law states that tech companies must be "secure and controllable," and some believe that could mean the Chinese government will want to examine proprietary technology.

"Foreign companies are worried about what that's going to mean," said Adam Segal, a senior fellow at the Council on Foreign Relations told The New York Times last week. "Does it mean they have to give access through backdoors, or are they going to have to partner with Chinese firms?”

Who knows. Either way, it's clear the Chinese government does not care about these concerns. President Xi Jinping is taking the country through a transition called "the new normal." It means lower growth but, hopefully, a more transparent and efficient economy. The government is banking on the idea that foreign companies want to be a part of that.

"In addition, as China continues to adjust its market economy, equal treatment for domestic and foreign firms has become an irreversible trend," the editorial said. "The lenient policies of yesterday have worn out their usefulness, and foreign companies should keep that in mind.

"Financial input from overseas and expertise in the process will be welcome, and the restructuring also means new business opportunities for foreign firms.

"But they should first abandon their victim complex and learn to adapt to the new norms in order to continue to thrive."

So stop your bellyaching ...

The logo of Google in front of the company's former headquarters in Beijing, seen in 2011