China Launches Investigation Of FedEx In "Warning To Foreign Companies"

Just hours after China’s retaliatory tariffs on the U.S. officially kicked in at midnight on Saturday in Beijing, affecting more than 2,400 goods that face levies of as much as 25%, compared with the previous charges of 10%, China took its first non-tariff retaliatory step, when it launched an investigation into FedEx for the wrongful delivery of packages, the country's state run Xinhua News Agency reported.

Earlier this week we reported that anticipating a backlash from Chinese officials that could seriously undermine its prospects in one of the world's largest growth markets, FedEx apologized to Huawei on Wednesday after the global logistics company "accidentally" diverted two packages sent from Japan that had been addressed to Huawei in China. The packages, which purportedly contained mundane - yet 'urgent' - legal documents, had been inexplicably rerouted to FedEx's US headquarters in Memphis. Two more packages sent from Vietnam were nearly re-routed as well.

Following the mishap, Huawei said it was reviewing its relationship with FedEx, and now Beijing has also gotten involved and in commentary read on its flagship evening news program, the state-run China Central Television said that "now that China has established a list of unreliable entities, the investigation into FedEx will be a warning to other foreign companies and individuals that violate Chinese laws and regulations."

“China welcomes foreign companies on condition that they abide by China’s law, regulation, market rules and the spirit of contract, and can’t harm Chinese customers’ legitimate rights.”

The Fedex "warning" comes one day after China said it will establish a list of “unreliable” entities that harm the interests of domestic companies, which could affect foreign enterprises as trade tensions escalate.

Following the report, China's de facto social network mouthpiece, Global Times editor-in-chief, Hu Xijin, tweeted that Fedex had prompted "strong suspicion" after the shipment diversion to "wrong places" and an investigation is being launched.

And just so there was no confusion about the intent behind the investigation, Xinhua used two hashtags in the two Weibo posts on the FedEx announcement: #RetaliateAgainstUSTradeBullying and #ChinaUSTrade.