US plans probe over China’s de­mands for tech trans­fers

Govt could in­voke rarely used sec­tion of Trade Act 1974

Kuwait Times - - BUSINESS -

The Trump ad­min­is­tra­tion is weigh­ing plans to pun­ish China for forc­ing US and for­eign com­pa­nies to share their tech­nol­ogy in re­turn for ac­cess to the vast Chi­nese mar­ket, a per­son fa­mil­iar with US dis­cus­sions said yes­ter­day.

The ad­min­is­tra­tion is con­sid­er­ing in­vok­ing the rarely used Sec­tion 301 of the Trade Act of 1974, which em­pow­ers Wash­ing­ton to in­ves­ti­gate Chi­nese trade prac­tices and im­pose sanc­tions, in­clud­ing tar­iffs, within months, said the per­son who spoke on con­di­tion of anonymity be­cause the plans have not been made pub­lic.

The in­ves­ti­ga­tion would fo­cus on China’s al­leged “forced tech­nol­ogy trans­fer poli­cies and prac­tices,” the per­son said, adding that the Trump ad­min­is­tra­tion could move to launch such a probe this week.

U.S. and other Western gov­ern­ments and business groups ac­cuse Bei­jing of un­fairly nur­tur­ing Chi­nese com­peti­tors - in fields rang­ing from med­i­cal equip­ment to re­new­able en­ergy to elec­tric cars - by re­quir­ing for­eign firms to hand over pro­pri­etary tech­nolo­gies in ex­change for be­ing al­lowed to op­er­ate in China.

China’s Min­istry of Com­merce did not im­me­di­ately re­spond to a faxed re­quest for com­ment. Th­ese de­lib­er­a­tions come as the ad­min­is­tra­tion sig­nals a harsher stance on trade than it took in the first six months of Trump’s pres­i­dency. Trump tem­po­rar­ily set aside com­plaints about mar­ket ac­cess and cur­rency when he met with Chi­nese Pres­i­dent Xi Jin­ping in April in hopes Bei­jing would help pres­sure North Korea to end its nu­clear weapons de­vel­op­ment. But ten­sions bub­bled up last month at a US-Chi­nese di­a­logue where US Trea­sury Sec­re­tary Steve Mnuchin blamed China’s $347 bil­lion trade sur­plus with the United States last year on “gov­ern­ment in­ter­ven­tion in its econ­omy.”

The Wall Street Jour­nal and New York Times also re­ported that US trade of­fi­cials are dis­cussing ways to counter piracy of copy­rights and patents and other in­tel­lec­tual prop­erty in China. US Com­merce Sec­re­tary Wil­bur Ross, in a com­men­tary in Tues­day’s Wall Street Jour­nal, out­lined a slew of griev­ances against both China and the Euro­pean Union that he said con­trib­uted to the global US trade deficit in goods of $725.5 bil­lion in 2016.

“Both China and Europe also bankroll their ex­ports through grants, low-cost loans, en­ergy sub­si­dies, special value-added tax re­funds and be­low-mar­ket real es­tate sales, among other means,” Ross wrote.

The Wall Street Jour­nal and New York Times sto­ries also said US of­fi­cials were look­ing into us­ing Sec­tion 301 of the 1974 Trade Act. An­other pos­si­bil­ity would be to in­voke the “In­ter­na­tional Emer­gency Eco­nomic Pow­ers Act,” a law also en­acted dur­ing the 1970s that gives the pres­i­dent wide pow­ers to take action af­ter declar­ing a na­tional emer­gency, the Wall Street Jour­nal re­port said. The ad­min­is­tra­tion also was con­sid­er­ing how to re­sist tech­nol­ogy-shar­ing de­mands from Bei­jing as part of its am­bi­tious Made in China 2025 pro­gram, a blue­print for mak­ing China a leader in ad­vanced tech­nolo­gies such as au­ton­o­mous driv­ing, ar­ti­fi­cial in­tel­li­gence, ro­bot­ics and other in­dus­tries.

For­eign com­pa­nies have long com­plained over ram­pant piracy and tech­nol­ogy theft by Chi­nese com­pa­nies. Though he has at times sought a more con­cil­ia­tory ap­proach, Trump also has lam­basted China over such prob­lems and over the mas­sive US trade deficit.

—AP

BEI­JING: A man walks by va­cant stores at a com­mer­cial build­ing in Bei­jing yes­ter­day. The econ­omy faces head­winds as Bei­jing clamps down on lend­ing to rein in a surge in debt that has fu­eled fears it might harm the fi­nan­cial sys­tem or drag on growth.

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