Fri, Dec 28, 2018 - Page 1 News List

China draft law would ban forced tech transfer

Reuters, BEIJING and SHANGHAI

Technicians on Wednesday work at a BGI genetic testing laboratory in Kunming, China.

Photo: Reuters

China has proposed a ban on forced technology transfers and illegal government “interference” in foreign business operations, practices that have come under the spotlight in a trade dispute with the US.

The final draft law published by the top legislature on Wednesday with 39 articles was far shorter than a version released in 2015, but took a notably stronger line on intellectual property (IP) protection.

“Official authorities and their staff shall not use administrative means to force the transfer of technology,” the draft says.

That compares with a general statement in 2015 that foreign firms’ IP rights would be protected.

In an apparent move to emphasize reciprocity, the draft said that China would reserve the right to retaliate against countries that discriminate against Chinese investment with “corresponding measures.”

The draft law — the first of its kind — has been submitted to the Chinese National People’s Congress Standing Committee, which began a session on Sunday, and is to hold public consultations until Feb. 24.

Once adopted, the law would replace three existing ones that regulate joint ventures and wholly foreign-owned enterprises, although it would likely go through several readings before being submitted for formal approval, which could take another year or more.

However, state news agency Xinhua yesterday said that many lawmakers were calling for a prompt deliberation of the draft to put it to “a vote as soon as possible.”

However, Xinhua cited committee member Li Fei (李飛) as saying that it should be put before the full session of the assembly when it convenes its annual session in March.

Some law experts and business consultants remained skeptical about how far the law would protect foreign firms’ interests, given a lack of rule of law in China.

Meanwhile, China and the US have made plans for face-to-face consultations over trade next month, the Chinese Ministry of Commerce said yesterday.

Consultations through “intensive” telephone calls would continue in the meantime, ministry spokesman Gao Feng (高峰) told reporters, adding that talks have been steadily moving forward, despite the Christmas break in the US.

Gao did not comment directly when asked to confirm a media report on a US trade delegation visit scheduled for the week of Jan. 7.

A meeting next month would be the first in-person talks since US President Donald Trump met Chinese President Xi Jinping (習近平) in Buenos Aires on Dec. 1.

China has also said it would suspend additional tariffs on US-made vehicles and auto parts for three months starting on Tuesday, adding that it hopes both sides can speed up negotiations to remove all additional tariffs on each other’s goods.

In another reconciliatory sign, China on Tuesday issued a so-called “negative list” that specifies industries where investors — domestic or foreign — are either restricted or prohibited.

China would “comprehensively” remove all market access restrictions for foreign investors by the end of March in areas not included in a foreign investment negative list published in June, Gao said.

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