Cases of European firms forced to transfer technology in China are increasing, despite Beijing saying the problem does not exist, a European business lobby said yesterday, adding that its outlook on the country’s regulatory environment is “bleak.”
The EU Chamber of Commerce in China said that results from its annual survey showed that 20 percent of members reported being compelled to transfer technology for market access, up from 10 percent two years ago.
Nearly a quarter of those who reported such transfers said the practice was ongoing, while another 39 percent said transfers had occurred in the past two years.
“Unfortunately, our members have reported that compelled technology transfers not only persist, but that they happen at double the rate of two years ago,” Chamber vice president Charlotte Roule told a news briefing on the survey.
“It might be due to a number of reasons... Either way, it is unacceptable that this practice continues in a market as mature and innovative as China,” Roule said.
In certain “cutting edge” industries, the incidence of reported transfers was higher, such as 30 percent in chemicals and petroleum, 28 percent in medical devices and 27 percent in pharmaceuticals, she said.
China’s People’s Daily newspaper on Saturday wrote that Washington’s complaints on the issue were “fabricated from thin air.”
Amid the escalating US-China trade dispute, Beijing has put pressure on the EU to stand with it against US President Donald Trump’s trade policies, although the world’s largest trade bloc has largely rebuffed those efforts.
The EU has also become increasingly frustrated by what it sees as the slow pace of economic opening in China, even after years of granting China almost unfettered access to EU markets for trade and investment. However, European officials say publicly that they do not support the use of tariffs as a solution.
Trump earlier this month raised tariffs on US$200 billion of Chinese imports to 25 percent from 10 percent, and has said the duties are causing companies to move production out of China to Vietnam and other countries in Asia.
The majority of European firms in the chamber’s survey said that their business strategies were not changed by the trade dispute, although it was completed by 585 respondents in January and February, well before the US’ latest tariff increase.
At the time, 6 percent of respondents said they were moving or had moved production out of China as a result of the tariffs, while 4 percent said they were considering or had already decreased investment in China.
Forty-nine percent of the respondents affected by US tariffs said their companies had covered the cost themselves and kept prices the same.
The chamber said that members had a “bleak outlook” on China’s regulatory environment, with 72 percent of members saying they expected obstacles to increase or stay the same in the next five years, even as the Chinese government has vowed continued reform and opening.
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