EU body: Forced tech transfers rising in China

BEIJING: Cases of European firms forced to transfer technology in China are increasing despite Beijing saying the problem does not exist, said a European business lobby, adding that its outlook on the country’s regulatory environment is “bleak”.

China’s trading partners have long complained that their companies are often compelled to hand over prized technology in exchange for access to the world’s second-largest economy.

Demands by the United States that China address the problem are central to the two countries’ ongoing trade war, which has seen both sides pile tariffs on billions of dollars of each other’s goods.

The European Union Chamber of Commerce in China said yesterday that results from its annual survey showed 20 per cent of members reported being compelled to transfer technology for market access, up from 10 per cent two years ago.

A quarter of those who reported such transfers said the practice was ongoing, while another 39 per cent said the transfers had occurred less than two years ago.

“Unfortunately, our members have reported that compelled technology transfers not only persist, but happen at double the rate of two years ago,” said European Chamber vice-president Charlotte Roule.

“It might be due to a number of reasons. Either way, it is unacceptable that this practice continues in a market as mature and innovative as China,” said Roule.

In certain “cutting edge” industries the incidence of reported transfers was higher, such as 30 per cent in chemicals and petroleum, 28 per cent in medical devices, and 27 per cent in pharmaceuticals, she added.