PIIE-中国强迫技术转移问题_-_以及如何应对（贸易战）（英文）-2018.6-10页

POLICY BRIEF SUMMARY: China's Forced Technology Transfer Problem—And What to Do About It

Core Content

This policy brief analyzes the issue of forced technology transfer by China and suggests a multilateral, targeted approach to address it. The focus is on how China's policies compel foreign multinational corporations (MNCs) to transfer sensitive technologies to indigenous firms, undermining intellectual property (IP) rights and international trade norms. It critiques the Trump administration's strategy of imposing broad tariffs and highlights the need for more precise and effective countermeasures.

Main Points

1. Forced Technology Transfer in China

• China's policies are designed to force foreign MNCs to transfer strategically sensitive technologies to local firms as a condition for market access.
• This is achieved through:
  • Foreign Direct Investment (FDI) regimes that require joint ventures with state-controlled entities.
  • State-owned enterprises (SOEs) acting as gatekeepers in key industries.
  • Regulatory barriers that lack transparency and are influenced by political considerations.
• Examples include:
  • The auto industry, where foreign firms must form joint ventures with Chinese entities.
  • The IT and telecommunications sectors, where access to the Chinese market is restricted.
  • The energy and healthcare sectors, where SOEs dominate procurement decisions.

2. Economic and Global Implications

• Forced technology transfer deters MNCs from investing or operating in China, harming both China and the global economy.
• It leads to higher production costs, lower efficiency, and slower global innovation.
• It also subsidizes less innovative Chinese firms and imposes a de facto tax on foreign enterprises.
• Violates WTO principles and China's accession obligations, particularly the TRIMs and TRIPs agreements.

3. Critique of Current US Response

• The Trump administration's approach of broad-based tariffs risks greater harm to US firms and workers than to Chinese entities.
• Multinational corporations are reluctant to disclose forced technology transfer practices due to fear of retribution.
• Bilateral negotiations have failed to address the issue effectively, and WTO dispute resolution is limited in its ability to sanction China.

Key Recommendations

1. Use of CFIUS as a Tool

• The Committee on Foreign Investment in the United States (CFIUS) should be used to monitor and restrict outbound technology transfers to countries of concern.
• CFIUS should not review outbound FDI by US multinationals, as they are better positioned to assess risks.
• Focus should be on technology licensing to unaffiliated Chinese entities that are likely influenced by the Chinese government.

2. Define Critical Technologies and Countries of Concern

• A narrow definition of critical technologies should be created through interagency review, involving National Academies and federal science agencies.
• Countries of concern should be designated based on systematic underprotection of foreign IP and pervasive efforts to shift technology.
• International concurrence should be required before designating a country as one of concern.
• Countries should be able to petition for reclassification after a period of improved practices.

3. Consider Third-Country Access

• CFIUS should assess whether foreign entities can obtain technology from third countries.
• If so, restrictions should not be imposed unless third parties also agree to limit transfers.

4. Allow Appeals and Legal Challenges

• Firms affected by CFIUS restrictions should have the right to appeal and challenge decisions in court.
• Appeals should be based on national security threats, not economic inconvenience.
• Evidence from CFIUS reviews can be used in export control law prosecutions.

5. Use of IEEPA for Targeted Sanctions

• The International Emergency Economic Powers Act (IEEPA) can be used to impose targeted sanctions on Chinese entities involved in forced technology transfer.
• Sanctions may include:
  • Travel bans for key Chinese individuals.
  • Asset freezes on Chinese firms.
  • Trade and financial penalties on entities benefiting from technology misappropriation.
• Multilateral cooperation with Western allies is essential to ensure effective enforcement and minimize retaliation.

Conclusion

The brief emphasizes that forced technology transfer is a systemic issue in China that requires a targeted, multilateral response. It proposes reforms to CFIUS and the use of IEEPA to create a more effective and equitable strategy for countering China's practices. The goal is to discourage forced technology transfers without triggering a full-scale trade war that could harm the global economy.