China rejects US charge of forced technology transfer at WTO

Trump has announced $50b tariff penalty against Chinese goods

GENEVA: China informed the World Trade Organisation’s (WTO) dispute settlement body that US accusations about Beijing forcing the companies to hand over technology, as a cost of doing business in China, were groundless.

While alleging that China is stealing American ideas, President Donald Trump has announced a $50-billion tariff penalty against Chinese goods. Both sides engaged in legal complaints at the WTO over the issue earlier this year.

“There is no forced technology transfer in China,” Chinese Ambassador Zhang Xiangchen told the meeting.



“According to the US’s view, China forces the US companies to transfer technologies by imposing joint venture requirements, foreign equity limitations and administrative licensing procedures,” Zhang said. “But the fact is, nothing in these regulatory measures requires technology transfer.”

Zhang claimed that the US argument involved a “presumption of guilt”. On the other hand, the US Trade Representative (USTR) believed US firms in China faced an obligation to hand over technology, while failing to produce any evidence.



Some of its claims were “pure speculation”, he said, adding that the USTR saw Chinese M&A activity as a government conspiracy.

Technology transfer was a normal activity that benefited the United States the most, he said, while Chinese innovation was driven by “the diligence and entrepreneurship of the people, investment in education and research, and efforts to improve the protection of intellectual property.”

Legal experts say Washington needs WTO’s backing to implement its tariffs while China has rejected the plan altogether and resorted to WTO’s action to stop it. Under WTO’s rules, if disputes are not settled amicably after 60 days, the complainant can ask for a panel of experts to adjudicate, escalating the dispute and triggering a legal case that takes years to settle.



The United States, which launched its complaint on March 23, could have used the dispute meeting on Monday to take that step. China could do so at the meeting next month.

But since the dispute erupted, US-China trade policy has been the subject of high-level bilateral talks. Trump tweeted that “our trade deal with China is moving along nicely” but that it probably needed a “different structure”.



The United States put China’s technology transfer policies on the agenda of Monday’s meeting, without elaborating.

Published in The Express Tribune, May 29^th, 2018.

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