SCMP article was same title as thread

Very good article all concerned about the tariff talks should read.

I have been telling readers that this tariff war with China is about IP theft and forced partnerships in China. It is for the benefit of the US multinational companies seeking to do business in China----that is all it is about contrary to the opinions of many posters here and many people across the country. It is not about jobs in the USA per se nor is it about cheap trinkets or even Chinese steel.

I have also been saying the best way to protect your IP---don't build plants in China.

I hate IP theft and I am happy the US has strong patent laws. Those laws have allowed US companies invest to develop great new technology. Now we want Chinese companies and others in China to have the same protection and be able to profit from that protection. Why that is a goal of the US is beyond me but in reality that is exactly what we are doing. We are doing it at the expense of US consumers and US manufacturers needing intermediate products from China for US manufacturing operations.

Some exerts:

quote:
Of the many criticisms of China from the Donald Trump administration, those on forced technology transfer have been among the fiercest.
It is a chronic and prevalent problem that Beijing uses “a variety of tools” to pressure the transfer of technologies to Chinese companies, the United States argues, and more tolerance of it would cause heavier losses to the US, especially with Beijing pursuing world dominance in many industries.

The Chinese government has rejected such accusations both publicly and in government-to-government communications.

Forced technology transfer (FTT) means that when a foreign company wants to enter the Chinese market, it has to surrender its technology to Chinese companies through a joint venture agreement, or in some cases regulations. Some foreign companies have said they were forced to do so.

US pushes ‘needed structural changes’ on forced technology transfers

If there were coercion, Chinese officials claim, foreign companies could choose not to invest in China. If multinationals make hefty profits on the mainland then they benefit from investing in China under terms which are neither discriminatory nor coercive, they have said.

A valid point--note they do not even try to say they have not been getting IP. In the past they were simply saying this is how we do business in country if you don't like it don't do business here.

quote:
According to the office of the United States Trade Representative (USTR), China’s foreign ownership restrictions, such as those for joint ventures and equity, and various administrative review and licensing processes, require or push for technology transfer from US companies.

In an update in November, the USTR said China’s practices relating to technology transfer, intellectual property and innovation were “unreasonable or discriminatory and burden or restrict US commerce”.

Evidence it cited was mainly surveys conducted by business chambers in China. Last July, the 2018 China Business Report of the American Chamber of Commerce in Shanghai stated that 21 per cent of 434 respondent member companies had felt pressure to transfer technology in exchange for market access.

This pressure was particularly evident in hi-tech industries, with 44 per cent of aerospace and 41 per cent of chemical companies having reported facing “notable” pressure to transfer technology.

The quote in bold is language directly from the 301 filed at the USTR office. A directive interested Americans that want to know the real facts about this trade war should read.

quote:
The USTR has acknowledged the unlikelihood of a company accusing China directly, because there would be concerns about possible retaliation against their business in China.

This is something Trump is having to deal with---no doubt Apple and Boeing and Caterpillar and others are expressing huge concerns that the trade war may force them out of China. (each of them have met with Ross privately.) This pressure is why I believe the trade war will be over soon.

Another reason I suspect the trade war will end soon is that China is trying to throw the US a bone:

quote:
Huo Jianguo, former research head with the Ministry of Commerce, said: “China has always claimed forced technology transfer does not exist.

“The latest development is Beijing recognises the problem may exist at local government levels as part of preconditions for market access, so it is addressing the issue through legislation.”

A draft foreign investment law was revealed last month as pressure mounted on Beijing. It states that forced technology transfer through administrative measures is prohibited, and technology cooperation should be “based on voluntarily agreed terms and business practices”.

Chinese analysts said this was a potential guarantee for multinationals, but foreign businesses are sceptical about enforcement of the law.

Shi Yinhong, director of the Centre on American Studies at Renmin University, said China was likely to agree to set up a monitoring mechanism so that the US could keep an eye on enforcement.

“If the US does not press too hard for a radical change, China is likely to make concessions,” Shi said.

Such promises are not expected to dispel fears and distrust from the US that have built as China has become a threat to it, while the involvement of China’s government in its economy remains heavy, analysts said.

Also in the article is video about the importance of foreign investment in China.

The trade war will soon end because:

1) Trump recognizes the war has hurt the economy and the stock market
2) China is making changes regarding IP that will help both US and Chinese companies and they recognize the US will want to monitor the effectiveness of these new laws
3) China needs foreign investment and US companies want to invest there.

Long thread I know.

Try to at least read it and the article.

This post was edited on 1/10/19 at 3:21 pm