AP NEWS

China’s legislature takes up law to ban forced tech transfer

December 24, 2018

BEIJING (AP) — China’s legislature is considering a law to ban local governments from forcing foreign companies to hand over technology, an issue that helped to spark Washington’s tariff war with Beijing.

Beijing rejects complaints companies are required to trade technology for market access. But officials including Premier Li Keqiang promised this year to crack down as tensions with Washington heated up.

A proposed foreign investment law taken up Sunday by the legislature would make clear officials cannot “force the transfer of technology” as a condition of ventures, the official Xinhua News Agency said.

Washington and Beijing have raised tariffs on billions of dollars of each other’s goods in a dispute over American complaints China’s industry plans are based on theft of technology and violate its market-opening obligations.

The proposed law promises foreign investors their patents, copyrights and other intellectual property will be protected, according to Xinhua.

Forced technology transfer is one issue Presidents Donald Trump and Xi Jinping agreed Dec. 1 to negotiate as part of a cease-fire in their tariff war, the White House announced earlier.

The Ministry of Commerce said last week envoys for the two sides planned to meet in January for talks.

Chinese regulators say forced technology transfer is contrary to official policy. But companies in industries including auto manufacturing and pharmaceuticals that want to operate in China must do so through partnerships that require them to share know-how with potential local competitors or teach them how to develop their own.