Call it a Trump victory, or just fortuitous timing, but a week after the U.S. launched a formal investigation into China's lax approach to protecting intellectual property, Beijing has announced plans to tighten regulations.
China will improve its "not perfect" policing of trademark registration abuses and business intelligence theft to better protect foreign firms, vice commerce minister Wang Shouwen told reporters at a conference on Aug. 25, according to quotes cited by Reuters.
Trademark fraud and the theft of business secrets have been a regular source of complaint for foreign companies seeking to operate in China and have increasingly been recognized by Beijing as a hindrance to attracting foreign firms to the country.
China's government, earlier this month, announced a new initiative to attract foreign companies after government figures showed that foreign direct investment into the Chinese mainland was down 1.2% over the first seven months of this year compared to the same period last year. The Chinese government said a host of new regulations will create "a stable, fair, transparent and predictable business environment."
U.S. Trade Representative Robert Lighthizer on Aug. 18 initiated an investigation into Chinese regulations and practices, noting U.S. suspicions that China uses "opaque and discretionary administrative approval processes, joint venture requirements, foreign equity limitations, procurements, and other mechanisms ... in order to require or pressure the transfer of technologies and intellectual property to Chinese companies."
That move followed an Aug. 14 memorandum issued by President Trump instructing Lighthizer to assess the merits of a formal investigation into Chinese policy.
China's Ministry of Commerce labeled the investigation "irresponsible" and said it will "take all the necessary measures to resolutely defend the interests of China and Chinese firms." The war of words has raised fears that the investigation could trigger tit-for-tat sanctions between the world's two largest economies.
Beijing has been particularly angered by the Trump administration's decision to launch a "Section 301" investigation, which under U.S. law would enable action against China without reference to World Trade Organization rules. Section 31 was last used 15 years ago, about the same time that China became a member of the WTO in 2001.
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