GlaxoSmithKline plc (ADR) (GSK), China Mobile Ltd. (ADR) (CHL): Will China’s Corporate Crackdown Scare Off Investors?

Sources cited by The Daily Telegraph state that GlaxoSmithKline plc (ADR) (NYSE:GSK)’s harboring reservations over its stay in the country as the investigation intensifies. It seems almost unthinkable that GlaxoSmithKline plc (ADR) (NYSE:GSK) would abandon China entirely — leaving a pharmaceutical market expected to eclipse $300 billion by 2020 as the world’s second-largest market would be disastrous. But GlaxoSmithKline plc (ADR) (NYSE:GSK)’s woes in the country have to give investors pause when considering investing in a company betting heavily on China for growth. Chinese regulators ordered a number of recalls in the auto industry last month, and while that’s been one of the biggest investor boons during the economy’s slowdown, the tightening vice of regulation means that investors need to keep a close eye on China.

Some Chinese firms, however, still offer plenty of potential to heady investors. Rising telecom giant China Mobile Ltd. (ADR) (NYSE:CHL) hasn’t had a good year, with shares down more than 7% in 2013 — but that didn’t stop the stock from picking up more than 3% last week alone. China Mobile Ltd. (ADR) (NYSE:CHL)’s on the cusp of a new wave of middle class, urban consumers in the country, and it won even bigger news on Friday when reports emerged that Apple Inc. (NASDAQ:AAPL)‘s newest iPhone will become available for China Mobile Ltd. (ADR) (NYSE:CHL).

It’s a huge win for Apple Inc. (NASDAQ:AAPL), naturally, considering that China Mobile Ltd. (ADR) (NYSE:CHL) boasts more than 700-million subscribers. Apple’s also seen Chinese revenue fall recently — sales in the Greater China region fell 14% in the fiscal third quarter. For China Mobile Ltd. (ADR) (NYSE:CHL), however, it’s an equally giant win as the company looks to stave off competitors that have already embraced Apple products in the past, and are now advancing on the company’s dominant market share.

For investors of either company, it’s a great deal, and an example of the upside that China still brings.

The article Will China’s Corporate Crackdown Scare Off Investors? originally appeared on Fool.com and is written by Dan Carroll.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and China Mobile. 

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