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Donald Trump

Donald Trump to ‘pressure Xi Jinping at summit over forced tech transfer’

PUBLISHED : Wednesday, 01 November, 2017, 2:37pm
UPDATED : Friday, 03 November, 2017, 3:56pm

US President Donald Trump is likely to put on pressure on Xi Jinping to address the issue of forced technology transfers affecting foreign businesses during his visit to China this month, according to an influential business representative.

Jacob Parker, vice-president of China operations at the US-China Business Council, said the US probe into China’s intellectual property practices was “on the radar” for Trump’s China trip next week and it will offer a chance to talk directly with President Xi about the issue.

The Trump administration launched a probe in August into alleged Chinese intellectual property theft. It could result in Trump imposing punitive tariffs or sanctions on China within a year.

The investigation, which focuses on forced technology transfer and intellectual property violations in China, came after an impasse at the China-US Comprehensive Economic Dialogue in July, accelerating trade tension which many worry may lead to a trade war.

“The Section 301 investigation is definitely on the radar of President Trump during his visit to China,” said Parker. “I am positive that President Trump will have the outcome of the investigation to share with President Xi.”

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The probe comes as Beijing is looking to bolster its innovation strength and technological prowess.

China has shown strong appetite for hi-tech assets overseas and has become increasingly selective in outbound acquisitions, which has raised national security concerns in the US and Europe.

Parker said 20 per cent of the council’s member companies had been required to transfer technology over the past three years as a prerequisite for market access in China.

He said the Chinese government has expressed concerned about the intellectual property investigation. but was hesitant to engage directly with the US.

“They believe the concerns of the US government should be handled through multinational organisations like the dispute resolution mechanism of the WTO,” said Parker.

Foreign firms have long been worried about sharing business secrets in China – such as source codes and customer data in cloud computing; cutting edge technology in environmentally-friendly manufacturing or technical information on precision manufacturing – with their Chinese partners in joint ventures or to obtain licenses to operate on the mainland.

“The US authorities ... are not going to receive any more information from companies so they have been analysing the information and they will offer something to Trump before his visit,” Parker said.

Miao Wei, China’s Minister of Information and Industrial Technology, told the South China Morning Post on the sidelines of the Communist Party’s 19th Congress last month that he had received no reports of forced technology transfers. If found, he said, they would “surely correct ” the situation.

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William Zarit, chairman at the American Chamber of Commerce in China, said Beijing preferred to discuss issues of forced technology transfer and intellectual property violations at the WTO or the China-US Comprehensive Economic Dialogue.

“I haven’t heard a lot of from the Chinese side saying that technology transfer and IP violations have not taken place. What I heard is that the Chinese side really doesn’t appreciate the way that it has been approached or discussed,” he told a media briefing on Wednesday in Beijing.

Steve Bannon, the former White House chief strategist, told the Post in September that Washington would release the results of the investigation into alleged Chinese intellectual property theft before Trump’s visit to China.

Lu Xiang, a researcher at the Chinese Academy of Social Sciences, said the US was likely to tone down talk of the investigation during the summit as both sides needed a “friendly atmosphere” for the leaders’ meeting.