China's technology tactics irk its trading partners

ABC News | 5/19/2019 | Staff
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For four decades, Beijing has cajoled or pressured foreign companies to hand over technology. And its trading partners say if that didn't work, China stole what it wanted.

Communist leaders deflected demands for change until foreign frustration erupted into a showdown with President Donald Trump. He sent shockwaves through their export industries by slapping punitive tariffs of up to 25% on Chinese goods.

Europe - Japan - Trading - Partners - Trump

Europe, Japan and other trading partners object to Trump's tactics but echo American complaints. They say Beijing's tactics violate its market-opening commitments under the World Trade Organization.

American prosecutors go further. They say the Communist Party is the ringleader of a global industrial spying operation.

Leaders - Protections - Changes - Experts - Difference

Chinese leaders have promised stronger patent protections and other legal changes. Foreign experts say that will make little difference if the party won't enforce them.

"Chinese government efforts to encourage and direct firms to acquire technology from the United States are likely to continue as Beijing seeks to further develop its domestic high-tech industries," an American government panel, the U.S.-China Economic and Security Review Commission, said in a report this month.

Tactics - Beijing - Trading - Partners - Technology

Here are some tactics Beijing's trading partners complain it uses to improperly obtain foreign technology.

JOINT VENTURES: The strongest tool in Beijing's arsenal is the longstanding requirement for companies in most industries to work through state-owned local partners.

Goal - Partner - Competitor

The goal is for the Chinese partner to learn and eventually displace its foreign competitor.

Some balked but thousands of companies cooperated as the price of admission to the most populous global market.

Companies - Partners - Promises - Access - Technology

Many companies say Chinese partners abide by promises not to abuse their access to technology. But some say partners have copied chemical formulas, industrial processes and other secrets for their own operations, sometimes with local government support.

Beijing denies it forces foreign companies to hand over technology, but joint ventures won't work without foreign technology and manufacturing expertise.

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