China's fine on Qualcomm not "economic nationalism"

China's fine on Qualcomm is nothing but a legitimate act to regulate the market and create a fair environment for all businesses -- Chinese and foreign.

However, the hefty fine has rattled Western media, which have hyped China's nationalist sentiment.

The New York Times on Monday run a report saying that Qualcomm is a victim of China's "economic nationalism" and that foreign technology companies are "bumping into a regulatory ceiling."

This accusation is groundless and borders on absurdity. Qualcomm was fined because it has broken the law, not because it is a foreign company. What Qualcomm bumped into was malpractice, not "regulatory ceiling."

It is simple and clear that Qualcomm has violated Chinese law. It is equally simple and clear that if one breaks the law, one suffers the consequences. The fine is a fair decision based on unequivocal evidence and China's Anti-Monopoly Law.

Abusing its dominance in the industry, Qualcomm, for one thing, has been illegally charging companies what they call "Qualcomm tax."

For instance, if a Chinese company installs Qualcomm chips on the cellphones they are manufacturing, the company is required to pay Qualcomm as much as 5 percent of the price of the finished product as license fee.

Practices of the Chinese regulators in the past years have clearly shown that they were not singling out foreign companies for antitrust investigations.

Kweichow Moutai and Wuliangye, the two best-known liquor makers in China, were each fined more than 200 million yuan (about 32 million dollars) in 2013 for abusing their dominance in the domestic market.

The New York Times also indicates that the Qualcomm fine is a move by China to suppress the foreign chip-making giant in order to boost its own microchips industry.

Of course, most Chinese companies in the industry welcomed the fine. They did so primarily because it helps build a regulated and fair market, not solely because it has undermined a competitor.

A level playing field is good for all players -- Chinese and foreign. And the Chinese government has the responsibility to see it happen.

Qualcomm, along with many other foreign companies, benefits greatly from the Chinese market. Its earnings in China was almost half of the company's total revenue in 2014.

The company should draw a lesson from the fine and change course in order to prosper in China. Enditem