Tue | Sep 19, 2017

China pushes back against US trade probe

Published:Wednesday | August 16, 2017 | 8:00 AM
In this Tuesday, August 8, 2017 photo, a worker watches as shipping containers are loaded onto a ship at a port in Qingdao in eastern China's Shandong province. China's government says it will respond to a possible trade probe ordered by Donald Trump with "all appropriate measures" to protect Chinese interests.

China criticised Donald Trump's order for a possible United States trade investigation of Beijing's technology policies as a violation of global rules and said Tuesday it will "resolutely safeguard" Chinese interests.

Trade groups for technology companies welcomed Trump's order on Monday, but Chinese officials said Washington was violating the spirit of its trade commitments. They said Beijing will take unspecified action if Chinese companies are hurt.

"The United States should not be the underminer of multilateral rules," a foreign ministry spokeswoman, Hua Chunying, said at a regular briefing.

"If the US side disregards the fact it does not respect multilateral trade rules and takes action to damage the economic and trade relations between the two sides," said Hua, "then the Chinese side will never sit back, and will take all appropriate measures to resolutely safeguard the legitimate rights and interests of the Chinese side."

Beijing requires automakers and other foreign companies in China to work through joint ventures, usually with state-owned partners. They often are required to give technology to partners who might become competitors.

More than 20 per cent of 100 American companies that responded to a survey by the US-China Business Council, an industry group, said they were asked to transfer technology within the past three years as a condition of market access, according to Jake Parker, the group's vice-president for China operations.

"We don't believe market access should be contingent on transferring technology," said Parker. "It goes counter to China's WTO commitments."

 

COMPLAINTS

 

Foreign business groups complain that companies are being squeezed out of promising Chinese markets or pressured to hand over technology for electric cars and other emerging industries.

Trump said in April he was setting aside trade disputes while Washington and Beijing worked together to persuade North Korea to give up nuclear weapons development. But American officials have resumed criticising Chinese policy in recent weeks.

"The White House is right to make clear all options are on the table," said Robert D. Atkinson, president of the Information Technology and Innovation Foundation, an industry group in Washington, in a statement.

Parker noted then President Barack Obama ordered a similar investigation of Chinese policy on green technology in 2010. That ended in a negotiated settlement.

"It didn't lead to any unilateral sanctions against the Chinese," said Parker. "Nor did it undermine the overall US-China trade relationship."