Thu, Jun 21, 2018 - Page 1 News List

White House slams Chinese policy as threat

By Nadia Tsao and Jonathan Chin  /  Staff reporter in WASHINGTON, with staff writer

The White House Office of Trade and Manufacturing Policy late on Tuesday posted a report accusing China of committing “economic aggression” and targeting US technology and firms.

The 36-page How China’s Economic Aggression Threatens the Technology and Intellectual Property of the United States and the World says China hijacks intellectual property and pursues industrial policies that threaten US economic and national security, as well as the global economy as a whole.

China’s rapid economic growth and movement up the global supply chain has been achieved “in significant part through aggressive acts, policies and practices that fall outside of global norms and rules,” White House National Trade Council Director Peter Navarro wrote in the report.

US President Donald Trump’s top agenda in negotiating with Beijing is to reduce trade deficits and stop China’s aggressive acquisition of US technology and firms, he said.

China has acquired crucial technology and intellectual property in the US and other countries, which it then utilizes to drive its economic growth and develop high-tech industries, including its defense sector, and that some of that technology and intellectual property was stolen by physical and cyberespionage, evasion of US export control laws, counterfeiting and piracy, and reverse engineering, the report said.

It has deployed “coercive and intrusive regulatory gambits to force technology from foreign companies,” including imposing ownership restrictions on foreign investors in joint ventures, data localization, burdensome and intrusive testing, and discriminatory intellectual property laws, the report said

Beijing has also imposed indigenous technology standards that deviate significantly from international norms that could provide backdoor access for the Chinese government, forced research and development localization, prejudicial antimonopoly laws, expert review panels, Chinese Communist Party influence on corporate governance and placement of Chinese employees in foreign joint ventures, it said.

The report also accused China of utilizing economic coercion for technology acquisition, including limiting the export of raw materials and taking over corporations through state-owned enterprises.

Navarro told reporters in Washington that China’s use of cheap buyouts would not cause the US government to back down from combating intellectual property theft, and Trump would not tolerate Beijing achieving dominance over 75 percent of global high-tech manufacturing by 2025.

Little progress has been made in US-China talks despite the ample opportunities Trump has extended to Beijing, Navarro said, adding: “China has more to lose.”

China has underestimated the Trump administration’s will and he was confident that the White House report would allow the world to understand the systematic nature of Chinese economic aggression, Navarro said.

The report did not make any specific policy recommendations, but it lays some of the administration’s arguments for a more aggressive stance toward China over trade.

Additional reporting by Bloomberg

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