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China’s Promise: “No Forced Tech Transfers + Access to Finance”


Tuesday, China Tuesday promised more improvements in conditions for foreign companies including an end to officials pressing them to hand over technology; a Key irritant in its tariff war with Washington.

The announcement adds to a number of market-opening promises by the government, which is trying to make China’s cooling, state-dominated economy more productive.

Beijing also will ease restrictions on foreign competitors in some newly opened finance businesses, the Commerce Ministry said.

Complaints about Beijing’s technology ambitions helped to spark its tariff dispute with President Trump.

Trade negotiators are working out details of an 11 October agreement under which President Trump delayed a planned tariff hike on Chinese imports. He said Beijing agreed to buy more American farm goods in exchange.

Business groups welcomed the agreement as a step to breaking a deadlock in the 15-month-old conflict,

The pledge, as carried out, builds on a law enacted in March that prohibits use of “administrative tools” to force companies to give up industrial secrets. Business groups said that might leave officials free to use other leverage.

“Administrative organs may not implicitly or explicitly force the transfer of technology by foreign investors or foreign-invested enterprises,” Ye said.

Still open the Question of foreign companies that are required to work through Joint Ventures with Chinese partners.

China is trying to appeal to foreign companies for more direct investments, some of which have postponed or shifted investments to other countries out of concern about the impact of US and Chinese tariffs.

A ministry statement also promised to “eliminate all restrictions on the scope of business” of foreign banks, securities companies and fund managers. It pledged to “remove the requirement on total assets” for establishing a foreign-owned bank.“We will move faster to open finance industries,” said a deputy commerce minister, Wang Shouwen.

Business groups say high requirements for capital might keep foreign investors out of Chinese financial industries. As restrictions on licensing and operations also might discourage potential competitors.

Beijing has issued a series of market-opening promises over the past 2 years including abolishing limits on foreign ownership of companies in auto manufacturing, securities, banking, insurance and futures trading.

Full foreign ownership of futures traders will be allowed as of 1 January 2020 followed by mutual fund companies on 1 April and securities firms on 1 December. Until now, foreign investors have been limited to owning 51% of such businesses.

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