June 20, 2019

China Offers Trump a Trade Peace Deal. It May Not Be Enough.

The law may not change things meaningfully, said Donald Clarke, a specialist in Chinese law at George Washington University. The draft is vaguely worded, he said, and doesn’t acknowledge that the pressure American companies face to share their know-how often comes from behind-the-scenes maneuvering rather than strict government requirements.

As with many laws in China, it could also be moot if local governments decide not to enforce it or if penalties are not stiff enough.

“These forced tech transfers that people complain about don’t occur because some government department issues an order saying, ‘transfer this tech,’” Mr. Clarke said in an email.

“It’s done through the government department getting involved behind the scenes in the negotiations, or not granting discretionary permission to do something unless some tech is transferred. It’s very hard to stop through a specific rule.”

Still, Chinese analysts say the pledges are significant. Chinese laws and regulations are often succinct — only a page or two when American laws or regulations would require dozens or even hundreds of pages. The real work lies in carrying out the regulations, and Beijing is now prepared to impose the new rules diligently, Chinese analysts say.

The issue of forced technology transfer “is a longstanding complaint by American businesses in China and we are addressing it through legal adjustments,” said Tu Xinquan, the executive dean of the China Institute for World Trade Organization Studies at the University of International Business and Economics in Beijing. “So no matter what, there will be a positive impact to some extent, that is, in reducing America’s dissatisfaction with China.”

Chinese officials are also taking steps to strengthen intellectual property protections against counterfeiters and piracy. Chinese officials last month submitted a draft amendment to the country’s patent law that would raise the level of damages and fines for willfully infringing on patents.

Article source: https://www.nytimes.com/2019/01/08/business/china-trump-trade.html?partner=rss&emc=rss

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