Winton Dong

    dht620@sina.com

    ON Nov. 5 this year, the New York state bank regulator fined Agricultural Bank of China (AgBank) US$215 million, in the name of violating anti-money laundering regulations and suspicious transactions involving Russia and other countries.

    Such a move by the New York regulator followed a September action by the U.S. Federal Reserve, which ordered AgBank to improve international controls against money laundering.

    This is not the first time that Chinese financial institutions have been targeted in other countries. On Feb. 17 this year, Spanish authorities launched a raid on the Madrid offices of the Industrial and Commercial Bank of China (ICBC) and detained six high-ranking employees amid an investigation focusing on alleged money laundering and tax fraud. As far as I know, Bank of China Milan Branch and China Construction Bank New York Branch have also been investigated recently for similar reasons.

    Besides the financial sector, some other Chinese industries such as steel, iron and tire manufacturing have also been probed by the U.S. authorities. According to a recent Wall Street Journal report, the U.S. Ministry of Commerce has multiple times now accused Chinese steel producers of colluding to fix prices and conceal the origin of steel supplies. Based on their own allegations, U.S. authorities have levied punitive duties as high as 266 percent against four types of steel products imported from China. Due to its longtime policy of following the United States regarding China issues, the European Union said recently that it would also levy similar punitive duties on Chinese steel products.

    Why do Chinese enterprises in foreign markets frequently meet such frustrations and punishments?

    As a famous Chinese saying goes, “A tall tree catches the wind.” After more than 30 years of robust development, China has grown from a sapling into a tall tree. It will arouse world attention and catch winds from all directions. For example, it is for sure that the coming of Chinese banks and the internalization of the yuan will squeeze the existing space of American counterparts and challenge the postwar international financial order mainly dominated by the United States.

    Meanwhile, during their quick expansion to international markets, Chinese companies are in great need of talented personnel with expertise in local laws, rules and regulations. Because of the lack of such personnel, many Chinese companies just simply copy their former experiences in China, sometimes leading to incompliance with rules and laws of target countries.

    Frankly speaking, as a developing country, no matter how expensive it is, business frustrations and economic punishments are the tuition fee China must pay to acquire more experience and to mature. If we fall into the pit, a gain will be in our wit. At the same time, we can take concrete measures to improve our expertise in international business management and crisis handling.

    Firstly, China must hasten the pace of training and recruitment of more skilled staff members who are familiar with global markets, foreign laws, so as to make our performance in other countries watertight and in full accordance with legal structures of different nations.

    Secondly, those companies who want to tap international markets can hire experienced monitors and consultants from outside to avoid potential legal or policy entanglements in other countries.

    Finally, we should stick to the principle of reciprocity. While communicating with other countries, China should always adhere to such a principle. With the U.S. as an example, President-elect Donald Trump made several controversial promises during his campaign such as branding China a currency manipulator and imposing a 45 percent tariff on all Chinese imports. After taking office in January next year, the new administration may not necessarily resort to a trade war with China, despite Trump’s statements and pressure from many U.S. politicians for more containment of China. But Trump will also be under great pressure to invigorate a lousy economy and to try to keep his promise of “making America great again.” Under this circumstance, trade protectionism will possibly further gather steam in America.

    If Chinese companies are unfairly or even ill treated in the United States or other countries, the Chinese Government must take decisive countermeasures and all the necessary means to safeguard its lawful rights.

    (The author is the editor-in-chief of the Shenzhen Daily and guest professor of Shenzhen University with a Ph.D. from the Journalism and Communication School of Wuhan University.)