Wal-Mart's latest run-in with the Chinese government is fanning fears that China is rolling up the welcome mat for foreign companies.
This month, officials in the southwestern city of Chongqing ordered 13 Wal-Mart stores closed for 15 days because the retailer had sold less-expensive pork as the more-expensive organic variety. Authorities also fined the retailer nearly $423,000 and arrested two Wal-Mart employees, according to Xinhua, China's official news agency.
The retailer had been in the government's cross hairs before, but the harsh penalty imposed this time against Wal-Mart ? the world's largest retailer and a symbol of Corporate America? is seen by some as a proxy for China's sentiment toward foreign businesses. Wal-Mart, which has 353 stores in China, plans to reopen its Chongqing outlets on Oct. 15.
"If I were a foreign company, I'd be pretty scared right now," says Corbett Wall, a retail expert who heads +CW Associates, a Shanghai consulting firm. "I absolutely think that (what happened to Wal-Mart) has to do with tensions building up between China and foreign companies."