GlaxoSmithKline plc (ADR) (GSK), Abbott Laboratories (ABT): China’s Murky Business Climate Won’t Clear Up Soon

Which companies up next in China’s widening probe? According to a report from Reuters, the government next could go after the telecom, auto, and oil sectors, among others. It’s hard to tell just how much of an impact this expansion of the probe will have, however, considering how many firms in these industries are state owned, and, thus, extensions of Beijing’s ambitions.

PetroChina Company Limited (ADR) (NYSE:PTR) and fellow oil major SinoPec both interact with foreign oil firms through partnerships in the country, but it’ll be a much more shocking turn of events if Beijing accuses its own state-run firms of price-fixing – especially as oil demand picks up in the country, given the explosive rise of China’s auto sector.

PetroChina Company Limited (ADR) (NYSE:PTR)’s been dealing with problems of its own recently, as the government of Chad accused PetroChina of an oil spill in the African nation and suspended the firm’s operations. China’s turned toward Africa in its bid to increase its dominance of natural resources, and the setback won’t help PetroChina increase its presence in the growing continent. PetroChina’s shares have sunk this year to the tune of a 19% year-to-date loss, but the long-term picture for this company — as long as the Chinese middle class and urban populations continue to increase and fuel oil demand — looks optimistic.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 

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