Will China’s new forced technology transfer law satisfy US concerns?
- Experts question whether draft legislation will be enforced
- Pressure is building on China to act on major issue in trade war negotiations
Foreign businesses are sceptical that China's new legislation banning forced technology transfer will reduce confrontation with the US, saying the new laws may not change current practices.
The draft foreign investment law was revealed on Sunday as pressure mounts on Beijing to act on long-standing complaints from foreign governments and companies about forced technology transfers.
Chinese analysts said the new draft was a guarantee for multinationals intending to invest in China, but critics said it would depend on strong law enforcement.
EU expands WTO case against China’s alleged forced technology transfers
The new law, with a specific clause on protecting intellectual property, is an improvement on 2015 legislation which was drafted but never enacted.
The latest version states that forced technology transfer through administrative measures is prohibited, and technology cooperation should be “based on voluntarily agreed terms and business practices”, according to a Xinhua report.
Forced technology transfers are a key complaint by Washington in its trade war with Beijing, and a common issue for foreign investors, and pressure is building on China to act.
Steve Dickinson, a China lawyer with Harris Bricken, said the legislation would not resolve tensions.
“The system [of forced technology transfers] is not based on statutes. It is based on actual practice,” he said.
“This proposed statute will not address that fact. The US trade representative is very aware of this and will ignore this statutory effort,” he added.
