On Tuesday this week, China's Ministry of Commerce (MofCom) sent

shockwaves across the Shipping industry when it blocked the Shipping alliance of
three European shipping giants Maersk, MSC and CMA CGM.
In a strongly worded statement on its website, MofCom said on Tuesday that it
had decided after a seven-month antitrust review to forbid Maersk Line,
Mediterranean Shipping Co and CMA CGM to concentrate by setting up an
operational network. It also mentioned that the companies "failed to demonstrate
that the alliance would bring more benefit than harm or that it is in line with the
public interest."
The reason this announcement came as a surprise to many was that it was
already approved in the US and European jurisdictions by their respective bodies.
The mega alliance which was planning to pool 255 large ships was expected to
save significant costs for the shipping companies and provide stability to the
volatile East-West Trade.
With China being the worlds largest goods trading nation, with $4.16 trillion of
exports and imports in 2013 and having large infrastructure investments in
Shipping ports (7 out of top 10 global shipping ports are in China), China has an
obvious interest in ensuring global trade stays cheap.
Not an isolated decision
Perhaps this decision against the 3 Western companies cannot be viewed in
isolation. There have been recent developments in other sectors as well where
Beijing has tried to assert itself.
In a major development last month, China ordered its State Owned Enterprises
(SOEs) to stop working with major US Consulting firms including McKinsey and
Boston Consulting Group. They were accused of spying on behalf of US
government. All these firms have significant operations in China and are believed
to be working with many SOEs.
While this action was triggered more for the reaction against US charge against 5
Chinese military officers for hacking, rather than own doing of the US Consulting
firms. But it underscores growing concerns about Beijings sudden actions
against foreign firms.
Beijing had been stricter against the foreign IT products and services subjecting
them to closer screening. The State Internet Information Office will vet most
foreign IT products and services in China, including those in the communications,
finance, energy, and other sectors the government deems related to either
national security or the public interest. Windows 8 ban on the governemnt
computers was one of the fall out.
March last year, in a state-initiated campaign against Apple, it was heavily
criticised for ignoring Chinese consumers regarding Warranty concerns. Apple
was accused to be arrogant in dealing with Chinese customers, by a leading
newspaper Peoples Daily. The broadside against Apple took its toll and Tim
Cook had to publish an apology letter on the Apple website, acknowledging lack
of communication and promising to do more for the service-related issues
Beijing flexing muscles
So can we assume that Chinese authorities are becoming more assertive in
dealing with the foreign MNCs and are willing to flex the muscles when necessary?
It appears so.
While these issues can be viewed separately under different lights including
national security, consumer rights or protectionism etc., but it underscores that
China is more trigger-happy then before. And in such scenarios, there isnt much
which these companies can do in retaliation, aprat from complying.
After all, most of the global giants know that with European economy still under
stalemate and US struggling to pick up and sustain, Asia and particularly China is
the only market which can give them significant growths. Certainly China knows
this well.