TRADE BAT­TLE BREW­ING

The Washington Times Weekly - - Geopolitics -

The Trump ad­min­is­tra­tion’s de­ci­sion to go ahead with a for­mal in­ves­ti­ga­tion into China’s large-scale theft of Amer­i­can in­tel­lec­tual prop­erty was a ma­jor step for­ward for U.S. busi­nesses that have been sav­aged for years by sys­tem­atic Chi­nese cy­bere­co­nomic es­pi­onage.

The U.S. Trade Rep­re­sen­ta­tive Of­fice launched the for­mal probe last month, known as a 301 in­ves­ti­ga­tion, af­ter Pres­i­dent Trump is­sued a mem­o­ran­dum on the sub­ject Aug. 14.

A USTR no­tice states that the probe was launched Aug. 18 and will “de­ter­mine whether acts, poli­cies and prac­tices of the gov­ern­ment of China re­lated to tech­nol­ogy trans­fer, in­tel­lec­tual prop­erty, and in­no­va­tion are ac­tion­able.”

The probe is a set­back for pro-China of­fi­cials within the Trump ad­min­is­tra­tion and out­side of it who have sought to pre­vent any puni­tive ac­tion from be­ing taken against Bei­jing. China has threat­ened a trade war over the probe that could re­sult in sanc­tions be­ing im­posed on China.

Ad­min­is­tra­tion sources said Mr. Trump or­dered the probe af­ter meet­ing with tech­nol­ogy com­pany chiefs, in­clud­ing the heads of Ap­ple, Ama­zon, Mi­crosoft, Google and other Sil­i­con Val­ley firms in June.

The unan­i­mous view of the tech­nol­ogy giants was that the United States is hem­or­rhag­ing trade and tech­nol­ogy se­crets to the Chi­nese. More than $4 tril­lion in in­tel­lec­tual prop­erty has been stolen by Bei­jing, and Sil­i­con Val­ley urged tak­ing ac­tion.

The USTR of­fice will hold a hear­ing on the in­ves­ti­ga­tion Oct. 10.

The White House memo stated that China has im­posed laws, poli­cies and prac­tices and acted in ways that may re­quire the trans­fer of Amer­i­can tech­nol­ogy and in­tel­lec­tual prop­erty to Chi­nese com­pa­nies. The Chi­nese prac­tices to be in­ves­ti­gated in­clude opaque ad­min­is­tra­tive ap­proval pro­cesses, joint ven­ture re­quire­ments, for­eign eq­uity lim­i­ta­tions, pro­cure­ments and other means to limit U.S. com­pa­nies in China “in or­der to re­quire or pres­sure the trans­fer of tech­nol­ogy and in­tel­lec­tual prop­erty to Chi­nese com­pa­nies.”

Chi­nese gov­ern­ment of­fi­cials also are us­ing vague rules that are se­lec­tively ap­plied to pres­sure for­eign com­pa­nies to turn over pro­pri­etary tech­nolo­gies.

Bei­jing also is said to be sys­tem­at­i­cally buy­ing U.S. com­pa­nies and as­sets for tech trans­fers.

The probe also will ex­am­ine “whether the Chi­nese gov­ern­ment is con­duct­ing or sup­port­ing unau­tho­rized in­tru­sions into U.S. com­mer­cial com­puter net­works or cy­ber-en­abled theft of in­tel­lec­tual prop­erty, trade se­crets, or con­fi­den­tial busi­ness in­for­ma­tion, and whether this con­duct harms U.S. com­pa­nies or pro­vides com­pet­i­tive ad­van­tages to Chi­nese com­pa­nies or com­mer­cial sec­tors.”

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