A ban on the forced transfer of technology has been proposed by China. A draft has been prepared not just banning forced technology but also the illegal interference by the government in the foreign business operations. Due to the China’s trade conflict with the United States certain practices have come under scrutiny.
China is trying to resolve its prolonged trade dispute with the USA. USA has accused China of illegal trade practices which includes the theft and forced transfer of the intellectual property. As a response to resolve this a draft is prepared of foreign investment law.
Even though China denied the accusations by the USA, continuous effort is being made to bring betterment in its market access for the foreign investors and stakeholders.
The draft stated, “Official authorities and their staff shall not use administrative means to force the transfer of technology.”
In countries like the USA and Germany there has been growing tension with China. Companies like Huawei are getting banned by American and other countries as it is being claimed by US government that Chinese companies are spying on other governments.
In order to emphasize reciprocity, the draft law states that China would reserve the right to reach against those nation that separates Chinese investment with “corresponding measures”.
Now it is not confirmed how much this law will be implemented as Dan Harris, Seattle-based managing partner of law firm Harris Bricken said, “Laws in China on something like forced technology are paper; the reality may or may not match that paper.”
Adding, “I generally think that on something like this, past history is the best predictor of future performance, and few dispute that China has for the last 10 years been saying it would open up and it all but stopped about five years ago.”