China respects trade secrets of others, unless it wants something – experts

Xi Jinping, Chinese President

The lack of intellectual property protections is one of U.S. President Donald Trump’s major complaints about China.

With the world’s two biggest economies fighting each other in a trade war, Beijing points to statistics showing it respects the rights of international firms.

But experts say the country still wields its state-controlled legal system to take whatever trade secrets it wants for its own companies.

That’s an opinion shared by the United States and the European Union, which contend that China’s system can force companies to give up their technological or trade secrets if they want to do any business in the country.

And that’s not even accounting for the allegations of outright intellectual property theft, which detractors say is rampant in China.

In a March report, the Office of the United States Trade Representative pointed to longstanding and “numerous IP protection problems” in China, including forced technology transfers and the theft of trade secrets. Meanwhile, the EU, in a February report, cited issues including requirements for “the disclosure of business information when trying to enter the Chinese market” such as in joint ventures.

For its part, China’s Foreign Ministry said in July that the accusations of theft are “groundless” and cited statistics, including the country’s top global ranking for invention patent applications received and its payment in 2017 of US$28.6 billion in royalties, to show it is not only a major innovative power but one that respects and defends intellectual property rights.

But experts said that doesn’t tell the complete story.

“If it’s something that’s really meaningful to you and valuable to China, I think it’s going to be very hard to get a fair shake,” Mark Cohen, director of the China Initiative at the Berkeley Center for Law and Technology at the University of California, Berkeley, said.

Cohen, who served as an IP attache at the U.S. Embassy in Beijing for four years, cited a list of high profile court cases, including defeats by Idaho-based Micron Technology and Schneider Electric of France — the latter was the largest ever ruling against a foreign company in China.

Source: CNBC