China's New Protectionism

It’s been a rough year for foreign businesses in China. In April, Anglo-Dutch consumer goods giant Unilever was fined $308,000 for publicly announcing it was considering price hikes, allegedly sparking hoarding. In July fast-food giant KFC was pilloried in the state media for its use of powdered soybean milk, instead of the fresh variety, in outlets in Shanghai and Guangzhou. Italian luxury brand Gucci was accused of abusing employees in a Shenzhen boutique in October. All the companies apologized for the incidents, and Gucci replaced two store managers.

The real drubbing, however, has been reserved for Wal-Mart Stores and France’s Carrefour. In January the retailers were fined for misleading pricing in 19 stores and duly apologized. Both paid fines for selling expired products in the city of Changsha earlier this month. Then regulators in Chongqing accused Wal-Mart of selling regular pork mislabeled as organic. The world’s biggest retailer was forced to temporarily shutter 13 stores, paid a $573,000 fine, and saw 37 employees detained. Two of its top China executives resigned. Again, there was a public apology.