China vows not to ‘sit by’ if Washington destroys multilateral trade rules

Trump authorising inquiry into alleged theft of US Intellectual Property by China has raised concerns

KARACHI: Donald Trump’s controversial decision to sign a memo that authorises agencies in the US to initiate internal inquiries into alleged theft of American intellectual property by Chinese firms has raised deep concerns in China. China is usually very quick to look after its economic interests, and has refused to stand by and let this happen.

"We hope that the US trade representative respects facts and acts with prudence," the Chinese Ministry of Commerce said in a statement on its website.

It added that the US is not abiding by WTO regulations and damaging the trade relations of the two economic giants, "China will definitely not sit by, but take all appropriate measures to resolutely safeguard its legitimate rights and interests," the state-run Xinhua news agency reports.

According to estimates by the Trump administration, Chinese theft of intellectual property could be around US $600 billion. The estimate, if true, could damage relations with China, one of the biggest trade partners of the US.

Trade officials in the Trump team have been asked to begin investigating whether Chinese companies are misusing the ‘technology for market access’ rule China imposes on foreign companies wishing to operate inside its borders.

Trump, having signed an executive order to this end, further wants to “consider all available options” in order to challenge Chinese supremacy at the marketplace. “This is just the beginning; I want to tell you that. This is just the beginning,” Trump told journalists, further saying that “a very big move” was in the process. “We will uphold our values, we will defend our workers and we will protect the innovations, creations and inventions that power our magnificent country,” Trump said.

The Ministry of Commerce in China reacted to Trump’s statements, saying they did not conform to the spirit of international trade and reflected Donald Trump’s lack of commitment to the WTO. “If the US side disregards the fact it does not respect multilateral trade rules and takes action to damage the economic and trade relations between the two sides, then the Chinese side will never sit back and will take all appropriate measures to resolutely safeguard the legitimate rights and interests of the Chinese side," the Ministry’s press release said. "We believe the US side should strictly adhere to commitments and should not become the destroyer of multilateral rules,” it added.

According to rules in China, foreign companies can only operate in the country through joint ventures with state owned entities.  More than one-fifth of some hundred US based companies operating in China have faced Chinese requests of technology transfer from Chinese officials, in return for access to market, especially in the last few years.

The Vice President of the US China Business Council, Jake Parker, told reporters. "We don't believe market access should be contingent on transferring technology, it goes counter to China's WTO commitments.”

The memo could hurt Washington as it attempts to woo Beijing into putting more pressure on North Korea to give up its nuclear program.  China has rubbished these claims, affirming that they are separate issues, though adding that intellectual theft allegations are only going to add to the tensions.

“Given Trump’s transactional approach to foreign affairs, it is impossible to look at the matter without taking into account his increasing disappointment at what he deems as China’s failure to bring into line the Democratic People’s Republic of Korea. His idea of exploiting trade as a bargaining chip in dealings with China dates back to the campaign trail,” an op-ed in a Chinese newspaper has claimed. “Instead of advancing the United States’ interests, politicising trade will only acerbate the country’s economic woes, and poison the overall China-US relationship,” it cautioned.

“By trying to incriminate Beijing as an accomplice in the DPRK’s nuclear adventure and blame it for a failure that is essentially a failure of all stakeholders, Trump risks making the serious mistake of splitting up the international coalition that is the means to resolve the issue peacefully,” the piece concluded.

The President of the American Chamber of Commerce in Shanghai has remarked that trade should not be linked to Pyongyang, saying that an inquiry was, though,  a “measured and necessary step.”

“The president’s executive order reflects building frustration with Chinese trade and market entry policies, particularly those that pressure American companies to part with technologies and intellectual property in exchange for market access,” he said.

This story originally appeared on RT.