Technology transfers not forced, experts assert

Technology transfers have been voluntary commercial transactions between Chinese and US companies and the US accusation of transfers being forced by China is groundless and violates international trade principles, Chinese experts said.

The United States has accused China of using shareholding restrictions and administrative permissions to force US firms to transfer their technology to Chinese partners. The issue has been used as a justification by the Trump administration for its trade fight with China under Section 301 of the US Trade Act of 1974, which permits a response to trade practices deemed unfair, unreasonable or discriminatory.

Chinese experts said technology transfers between Chinese and foreign companies are done through commercial contracts and are conducted on an equal and voluntary basis.

Zhang Yalin, a member of the National Manufacturing Strategy Advisory Committee, said foreign companies' ties with Chinese firms have been driven by business interests, and they have helped them gain access to the Chinese market and abundant labor.

"Technology transfers have been based on mutual agreements between Chinese and foreign companies," Zhang said, adding that in many cases they have been carried out in the form of a paid license for usage and have not involved transfers of technology ownership.

"Technology offerings have been a means for foreign companies to obtain market share and investment returns in China. Many of the technologies were no longer core, advanced ones and had almost no application prospects in their home markets," Zhang said.

Zhang said accusations of forced technology transfers by China have distorted the fact that seeking ties with Chinese companies and setting up joint ventures in China are rational, profit-driven decisions by foreign companies.

The Trump administration's trade frictions with China have been seen by many experts as a move to target Beijing's Made in China 2025 initiative.

Chinese experts argued that the initiative is aimed at upgrading China's industrial and high-end manufacturing capability and it offers win-win results for Chinese and foreign companies.

"Many multinational companies have set up their global R&D centers in China to take full advantage of local high-quality labor and innovative resources. It has helped boost their own business development," Zhang said.

Xiong Meng, executive vice-chairman of the China Federation of Industrial Economics, said China's industrial upgrades provide an immense market for developed countries' high-end manufacturing equipment, spare parts and advanced materials.

Like the US plan to revitalize its manufacturing sector, the Made in China 2025 is China's vision to boost its manufacturing capability and to attract investment in technological innovation, and it does not involve any forced rules and regulations, Xiong said.

China has increased its technological competitiveness through growing investment in its own research and development, he added.