A trade group representing a number of high-profile U.S. technology firms, including Apple, Google, and IBM, spoke out against Chinese regulations at an International Trade Commission hearing on Tuesday, saying the Asian country’s rules help facilitate intellectual property theft.
In testimony on Tuesday, Erin Ennis, senior vice president of the U.S.-China Business Council, said China’s regulations for foreign investments require some companies to transfer technology to Chinese entities, the South China Morning Post reports.
The rules, which are in some cases applied as a condition of doing business in China, could place “unreasonable and discriminatory burdens” on U.S. firms, Ennis said. She added that transfer requirements are “an acute concern of American companies in key sectors, who often must make difficult choices about managing the trade-off of technology sharing and access to the world’s second-largest economy.”
According to a separate report from Reuters, via Insurance Journal, Ennis said surveys of the U.S.-China Business Council’s 200 members showed only a third had been asked to transfer technology under China’s laws. An even smaller “minority” was forced to do the same without compensation.
Still, Ennis views the ruleset as a problem and encourages President Donald Trump’s administration to challenge China’s mandates. The White House has already tasked Trade Representative Robert Lighthizer to initiate an investigation into similar allegations under Section 301 of the U.S. Trade Act of 1974, a process that could end in tariffs or import restrictions.
Ennis cautioned against a heavy-handed approach, however, saying officials should encourage the country to remedy any remaining problems instead of taking unilateral action that could dampen burgeoning trade relations. Also on the table is a dispute settlement process that would be handled by the World Trade Organization.
As Reuters notes, Chinese commercial groups were also at the hearing and contend their country has made steady progress in crafting an IP enforcement system, an institution that did not exist prior to China’s relatively recent rise as a modern economic powerhouse.