China says trade talks with US made progress on forced tech trans­fers, IP rights

Financial Chronicle - - PLAN, POLICY - REUTERS

CHINA and the United States made progress on “struc­tural is­sues” such as forced tech­nol­ogy trans­fers and in­tel­lec­tual prop­erty rights in talks this week and more con­sul­ta­tions are be­ing ar­ranged, China’s com­merce min­istry said on Thursday.

The three-day talks in Bei­jing that wrapped up on Wednesday were the first face-to-face ne­go­ti­a­tions since U.S. Pres­i­dent Don­ald Trump and his Chi­nese coun­ter­part, Xi Jin­ping, met in Buenos Aires in De­cem­ber and agreed on a 90-day truce in a trade war that has dis­rupted the flow of hun­dreds of bil­lions of dol­lars of goods.

The ne­go­ti­a­tions were ini­tially sched­uled to last two days but went on for three be­cause both sides were “se­ri­ous” and “hon­est”, Gao Feng, spokesman at the Chi­nese com­merce min­istry, told a news con­fer­ence.

Asked about China’s stance on is­sues such as forced tech­nol­ogy trans­fers, in­tel­lec­tual prop­erty rights, tar­iff bar­ri­ers and cy­ber at­tacks, and whether China was con­fi­dent it could reach agree­ment with the United States, Gao said those is­sues “were an im­por­tant part of this trade talk”.

“There has been progress in these ar­eas,” he said. He did not elab­o­rate.

The United States has pre­sented China with a long list of de­mands that would re­write the terms of trade be­tween the world’s two largest economies.

They in­clude changes to China’s poli­cies on in­tel­lec­tual prop­erty pro­tec­tion, tech­nol­ogy trans­fers, in­dus­trial sub­si­dies and other non-tar­iff bar­ri­ers to trade.

China has re­peat­edly played down com­plaints about in­tel­lec­tual prop­erty abuses, and has re­jected ac­cu­sa­tions that for­eign com­pa­nies face tech­nol­ogy trans­fer.

Nearly half­way into the 90-day truce, there have been few con­crete de­tails on any progress made.

Gao did not ad­dress ques­tions on what de­mands both sides raised, or if the United States had forced agreed to drop its plan to im­ple­ment ad­di­tional tar­iffs by the March 2 dead­line.

In a brief state­ment ear­lier, the min­istry said the talks were ex­ten­sive, and helped es­tab­lish a foun­da­tion for the res­o­lu­tion of each oth­ers’ con­cerns, but gave no de­tails.

On Wednesday, the US Trade Rep­re­sen­ta­tive’s of­fice (USTR) said of­fi­cials from the two sides dis­cussed “ways to achieve fair­ness, rec­i­proc­ity and bal­ance in trade re­la­tions”, and fo­cused on China’s pledge to buy a sub­stan­tial amount of agri­cul­tural, en­ergy, man­u­fac­tured, and other prod­ucts and ser­vices from the United States”.

At stake are sched­uled US tar­iff in­crease on $200 bil­lion worth of Chi­nese im­ports.

Trump has said he would in­crease those du­ties to 25 per cent from 10 per cent if no deal is reached by March 2, and has threatened to tax all im­ports from China if it fails to cede to US de­mands.

US of­fi­cials have long com­plained that China has failed to live up to trade prom­ises, of­ten cit­ing pledges to re­sume im­ports of Amer­i­can beef that took more than a decade to im­ple­ment.

No sched­ule for fur­ther face-to-face ne­go­ti­a­tions was re­leased af­ter the talks. The USTR said the Amer­i­can del­e­ga­tion was re­turn­ing to Wash­ing­ton to re­port on the meet­ings and “re­ceive guid­ance on the next steps”.

Both sides agreed to main­tain close con­tact, the Chi­nese com­merce min­istry said.

“For the next step, work teams from both sides will con­tinue to work hard and push for­ward con­sul­ta­tions as orig­i­nally planned,” Gao said.


Since the Trump-Xi meet­ing in Ar­gentina, China re­sumed pur­chases of US soy­beans. Buy­ing had slumped af­ter China im­posed a 25 per cent im­port duty on US ship­ments of oilseed on July 6 in re­sponse to US tar­iffs.

China has also cut tar­iffs on US cars, di­alled back on an in­dus­trial devel­op­ment plan known as “Made in China 2025”, and told its state re­fin­ers to buy more US oil.

Ear­lier this week, China ap­proved five ge­net­i­cally mod­i­fied (GM) crops for im­port, the first in about 18 months, which could boost its over­seas grains pur­chases and ease US pres­sure to open its mar­kets to more farm goods.

Big spend­ing on com­modi­ties and goods would send a pos­i­tive sig­nal on China’s in­tent to work with the United States, but would do noth­ing to re­solve the US de­mands that re­quire dif­fi­cult struc­tural change from China.

China has said it will not give up ground on is­sues that it per­ceives as core.

One of the big­gest chal­lenges to any deal would be to en­sure that China en­forces whatever is agreed to stop tech­nol­ogy trans­fers, in­tel­lec­tual prop­erty theft and hack­ing of US com­puter net­works.

The US Trade Rep­re­sen­ta­tive’s of­fice said of­fi­cials broached those top­ics and dis­cussed the need for any agree­ment to in­clude “com­plete im­ple­men­ta­tion sub­ject to on­go­ing ver­i­fi­ca­tion and ef­fec­tive en­force­ment”.

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