China is to bar government authorities from demanding that overseas companies hand over technology secrets in exchange for market share, a top economic official said yesterday, addressing a key complaint at the heart of a China-US trade dispute.
The provision is contained in a foreign investment law to be debated at the ongoing annual session of the Chinese National People’s Congress, Chinese National Development and Reform Commission Vice Chairman Ning Jizhe (寧吉喆) told reporters at a news conference.
The law would “clarify the system for advancement and protection of foreign investment,” Ning said.
The legal system would ensure that foreign businesses “cannot be required to transfer technology by administrative means, providing a more encompassing and beneficial legal guarantee,” he said.
The rubber-stamp legislature is expected to pass the law during its 11-day session, although the central government has routinely said that it has little control over commercial agreements between Chinese and foreign firms.
Ning’s statement came a day after Chinese Premier Li Keqiang (李克強) announced a robust annual economic growth target and promised in a speech to the congress’ opening session that foreign companies would be “treated as equals” with their Chinese competitors.
Accusations that China demands the disclosure of technology secrets are a key stumbling point in the US-China trade dispute that has significantly disrupted commerce between the world’s two largest economies, affecting farmers, liquor exporters and China’s key manufacturing industries.
Li on Tuesday set this year’s economic growth target at 6 to 6.5 percent. Such a growth rate, if achieved, would be among the world’s strongest.
Yet, it would be slightly less than last year’s 6.6 percent growth in China and would mark a new three-decade low.
China’s emergence as a competitor in smartphones, telecom equipment, solar power and other technologies has increased the range of products available to consumers and helped to drive down prices.
However, it has rattled Washington and other governments that worry Chinese competition is a threat to their industries and employment.
Such concerns underscore a standoff between the US and China over Huawei Technologies Co (華為), the world’s biggest maker of telecom infrastructure for new high-speed 5G networks.
Washington has been pushing hard to exclude the Chinese company from building the backbone of the future Internet.
News reports have said that Washington and Beijing might be close to an agreement to end the trade battle and avoid further tariff hikes, although no firm agreements have been announced on the core of the dispute: US pressure on Beijing to roll back its plans for the state-led creation of global competitors in robotics and other technology.
In June last year, the US levied import taxes of 25 percent on US$50 billion of Chinese imports. That was followed in September with 10 percent duties on an additional US$200 billion.
The US tariffs cover about half of what the US buys from China.
Washington, Europe and other trading partners have said that China’s policies violate its market-opening obligations and give an unfair advantage to domestic firms.
Some US officials worry that they might erode US industrial leadership.
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