China is reportedly considering a law to crack down on forced tech transfers
Added 12-24-18 02:02:02am EST - “China is considering changing its regulation regarding foreign businesses' intellectual property rights, according to a draft law reviewed by a legislating body on Saturday, local news outlet Caixin said in a report.” - Cnbc.com
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China is reportedly considering a new law on foreign investment that would emphasize the illegality of forced tech transfers — the practice of which has been a major complaint from Washington amid the ongoing tariff battle between the world's two largest economies.
Multiple local outlets reported on the under-consideration law, and Beijing-based news agency Caixin said Sunday the current draft calls for the prohibition of local governments "forcing foreign businesses to transfer technology or illegally restrict(ing) their market access."
The draft law has been interpreted by some as a move from Beijing to address complaints raised by the U.S. and others about the way China treats foreign firms hoping to do business in the country. Those grievances, coupled with a giant trade imbalance between the two global super powers, have led to the ongoing tariff battle that's roiled global markets.
China has long maintained that forced tech transfers are against its policy — and do not occur whatsoever — yet foreign business and government groups say the practice has continued nevertheless. A new law from the country's central authority may do little to quell concerns about what many describe as a regime of unwritten rules that force companies' hands.
"A broad range of experts and market observers agree that China has repeatedly forced foreign multinational corporations (MNCs) to transfer technology to indigenous firms as a condition for market access and that China has persistently failed to protect the intellectual property of foreign firms doing business in China," Lee Branstetter, Carnegie Mellon University professor of economics and public policy, wrote in a June policy brief for the Peterson Institute for International Economics.
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