Lord Macartney, Britain’s first envoy to Beijing, caused an uproar at the Chinese court in 1793 when he refused to kowtow at the feet of the Qianlong emperor. Some 220 years on, prudent European executives will do what is necessary to keep a foothold in China’s immense market.
Witness the haste with which Nestlé and Danone, the Swiss and French groups, cut their local prices for infant formula milk after Chinese authorities launched a probe into price-fixing and anti-competitive behaviour in the baby food sector.
This undisguised pressure from Chinese officialdom seems to form part of a broader campaign to cut prices for domestic consumers. Over recent months, officials have targeted a wide range of foreign and domestic companies, from drug manufacturers and luxury carmakers to jewellers. As far as concerns over the baby milk business, Beijing has a point of sorts.