Article: Does China Force Foreign Companies to handover technology

In Articles, Business & Commerce by TechnoOwl

Claim: China forces foreign companies to hand over proprietary technology.

Origin: Stories of foreign companies having to share their Intellectual Property and Technology with local Chinese partners

Facts:

  • China does not force anyone to do anything. It is simply a precondition that certain companies in strategic industries Not all who wish to have access to the Chinese market must form a joint venture with a local company and shares their IP. They are not under threat to hand over their IP and are free to have their choice of the local company or are free to decline the agreement at any time if they wish as well why would any sane/competent company sign a contract with a local company without vetting them for integrity and security compliance beforehand.
  • Under the recently signed China-EU, Comprehensive Agreement on Investment China will lift any requirements on Technology Transfers when European enterprises enter the Chinese market.
  • Under the World Trade Organization TRIPS Agreement, developed nations are encouraged to promote technology transfer to less developed countries.
  • Under Article 66.2 of the TRIPS Agreement, developed country Members shall provide incentives to enterprises and institutions in their territories for the purpose of promoting and encouraging technology transfer to less-developed country Members in order to enable them to create a sound and viable technological base. (Source)
  • “The TRIPS Agreement is a minimum standards agreement, which allows Members to provide more extensive protection of intellectual property if they so wish. Members are left free to determine the appropriate method of implementing the provisions of the Agreement within their own legal system and practice.” Joint ventures with local companies is China’s answer to the implementation of the TRIPS Agreement. (Source)