In the news: China probes GE, Royal Philips and Siemens, police raid Uber's office and the domestic bond market opens up to foreigners

China said to probe medical device firms for bribery

China is probing foreign medical equipment makers over suspicion that they may have paid bribes or used illegal means to achieve market dominance, a source told Bloomberg. Regulators including the State Administration for Industry and Commerce (SAIC) conducted preliminary investigations last year into the Chinese healthcare units of General Electric, Royal Philips and Siemens. The three are said to make up over 80% of China's market for large medical equipment (such as CT and MRI scanners). The authorities are looking at whether they achieved dominance illegally such as by bribing hospitals to use their products, although formal investigations are yet to begin. Siemens stated their work with the SAIC is not corruption-related. The investigations are part of a larger campaign by President Xi Jinping to weed out corruption in China that have been felt as far away as the casinos of Macau. These incidents in particular are probably also aimed at ensuring foreign players do not hold an abnormally large share of a market that China wants its own companies to get into. This can put overseas companies in a fix: control expansion and sacrifice profits, or grow aggressively and risk attracting the wrath of regulators.

More from CLP:
Five tips for managing corruption risks
GSK: A case study
Avoiding the pharma blacklist
How to deal with the corruption crackdown
Pharma firms deal with clinical trial complexity
Cisco interview: Adopting the right mindset


Police raid Uber's China office

Police raided Uber Technologies' office in Guangzhou on Thursday night amid allegations the company was running an illegal transport service, according to local newspaper Guangzhou Daily. It is unclear what formal charges Uber may face. The city's traffic department is cracking down on unlicensed and illegal transport operations that are “suspected of lacking proper commercial registration papers and of organising public taxis lacking qualifications in business operations,” according to a Xinhua report. Mobile phones and other equipment were confiscated from Uber's office. Although Uber has faced legal problems in many countries, it was able to operate in China through a legal loophole that allowed for private taxi services using rental cars for its high-end services. It announced a tie-up with Baidu in December with the aim of partnering with a strong Chinese player with good government relations, but it appears not all is going to plan.

More from CLP:
China question: What should I do when I'm being investigated?
PRC Foreign Investment Law (Draft for Comments)
Setting up a WFOE just got easier
China question: How can I get a new legal representative?


China opens up bond market to foreigners

HSBC, Morgan Stanley and 30 other foreign institutions have been approved to invest in China's US$5.9 trillion domestic bond market, a leap forward in opening the country's capital markets to foreign investment. Economists have said relaxing restrictions on bond investment is crucial if China wants to attract international investors to store their savings in renminbi as big players like central banks, sovereign wealth funds, insurers and pension funds work heavily with fixed income. China is acting to combat rising outflows, which threaten to depreciate the renminbi and stymie efforts to revive an economy estimated to grow at its slowest pace in 24 years. Investments by foreign players will help improve the depth of the bond market and also provide an option for global companies to invest directly in onshore markets, rather than through Hong Kong's dimsum notes. This is part of several moves by China to open up its markets and help push its case for the renminbi to be declared a reserve currency by the IMF this October.

More from CLP:
Factors for capital markets growth
Beijing Tax Bureau to levy 10% tax on QFII investors, with no deductions for losses
Liberalising fund management
CITIC Capital interview: Challenges in opening up
PRC Securities Law (Revised in 2014)