Headline Feb 26, 2015/ ''' MAKING MONEY IN : AND FROM CHINA '''

''' MAKING MONEY IN : 

AND FROM CHINA '''

IN THE LAST DECADE, foreign technology companies have plowed billions into China in the hopes of tapping into a fast growing market.

Now that the country has the world's most Internet users and the largest smartphone market, foreign companies are bumping into the regulatory hurdles.

The starkest sign of that came recently, just over a week ago, when the American chip maker Qualcomm said it would pay  $975 million for violating China's antimonopoly law.

As a part of the deal, Qualcomm will also offer its licenses for third and fourth generation communication systems for  high-speed wireless data smartphones, at a sharp discount to what it charges companies elsewhere.

For foreign companies, it is a sign of the times. The Chinese government has put many foreign businesses operating in the country under heightened scrutiny for any sign or corruption, monopolistic practices and tax evasion.

Dozens of American, European and Japanese corporations in the last year have faced investigations and raids by the Chinese authorities.

The Qualcomm settlement is nearly double the amount the Chinese court charged the British drug maker GlaxoSmithKline in September after a criminal trial in bribery.

George S. Davis, Qualcomm's chief financial officer, said the company was disappointed with the size of the fine. The fine will knock  58 cents a share off Qualcomm's earnings for the year.

But the Chinese market   -and the potential for profit   -is to just too big for companies to ignore.

Settling the investigation, Qualcomm said, sets the stage for future growth.

Qualcomm;s chief executive, Steven M. Mollenkopf, said  ''we're still at the front end'' of the Chinese market, in terms of selling smartphones. He also added the agreement would enable Qualcomm to work closely with the Chinese companies:

Like Xiaomi, an innovative maker of software-rich phones, as they expand into markets such as India and the United States-

''We've had a number of strong partnerships.'' he said. ''Now we are better positioned.''

Even so, the ruling opens a new front in the economic conflict between China and the United States.

While Beijing says foreign companies are simply one part of a larger campaign, some companies argue that they are the victims of  economic nationalism.

During his November trip to China, President Obama specifically brought up antimonopoly investigations, according to a person with knowledge of the matter.

''That goes beyond Qualcomm; now it's an issue for all major companies, both U.S. and the European, that have important patent rights and want to license them and operate in China,'' said Alden Abbott, a legal and trade expert at the Heritage Foundation, a research group based in Washington.

During the yearlong investigation in to Qualcomm, Chinese officials have made little effort to hide a new economic nationalism.

The Chinese Internet Czar Lu Wei, in recent trip to Washington, pointed out that   half of Qualcomm's revenue came from China. Mr Lu said that foreign companies could not expect to simply make money from China without being its '''friend'''.

Emphasizing that reality, a report in state-run media just later, noted that the Qualcomm settlement was more than the total amount of antimonopoly fines given out by China's National Development and Reform Commission in 2014.

The regulator has taken a much more aggressive stance in the last year, conducting  a series of raids on major companies.

In a new conference later, the commission sought to defend its $975 million fine against Qualcomm, saying that the punishment was not designed to  ''protect any industry, but more importantly to restore market competitiveness.''

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