But the major sticking point remains China’s controversial rules forcing foreign companies to give up sensitive technology to do business in the country. Trump has slammed that rule. And now the European Union has challenged China before the World Trade Organisation (WTO) over these same rules, the bloc’s executive has announced.
Many of China’s trading partners have been angered by the issue of forced technology transfers. The US mentioned that this was one of the factors at the core of the current trade dispute between the two nations.
‘We cannot tolerate that EU companies have to give away valuable technology as a price to pay for investing in China,’ said EU Trade Commissioner Cecilia Malmstrom. She noted that this went against the rules that Beijing had signed when it joined the WTO.
EU is testing Chinese laws regulating joint ventures
On Thursday, she said in a statement that for European companies, this ‘illegal practice’ is a ‘major issue’ when doing business with China, according to DPA.
The commission said that the EU is testing Chinese laws regulating joint ventures. It is also challenging investments in the biotechnology and electric vehicles sectors.
According to the commission (EU’s trade watchdog), these laws ‘force or induce European companies to transfer technology to their joint ventures with Chinese partners in exchange for the necessary administrative approvals by the Chinese authorities’.
The statement also said that foreign companies have to do research and development activities in China.
As DPA reports, ‘China committed when joining the WTO not to impose such requirements and to grant companies contractual freedom, notably in the context of investments and technology transfers, the commission said, noting that Beijing is therefore in violation of its legal commitments.’
June was when the EU first put their appeal forward to the WTO. The aim was to target China’s rules on joint ventures, exports and technology imports.
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