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China says trade talks with U.S. made progress on forced tech transfers, IP rights

Kitco News

BEIJING/SHANGHAI (Reuters) - China and the United States made progress on “structural issues” such as forced technology transfers and intellectual property rights in talks this week and more consultations are being arranged, China’s commerce ministry said on Thursday.

The three-day talks in Beijing that wrapped up on Wednesday were the first face-to-face negotiations since U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, met in Buenos Aires in December and agreed on a 90-day truce in a trade war that has disrupted the flow of hundreds of billions of dollars of goods.

The negotiations were initially scheduled to last two days but went on for three because both sides were “serious” and “honest”, Gao Feng, spokesman at the Chinese commerce ministry, told a news conference.

Asked about China’s stance on issues such as forced technology transfers, intellectual property rights, tariff barriers and cyber attacks, and whether China was confident it could reach agreement with the United States, Gao said those issues “were an important part of this trade talk”.

“There has been progress in these areas,” he said. He did not elaborate.

The United States has presented China with a long list of demands that would rewrite the terms of trade between the world’s two largest economies.

They include changes to China’s policies on intellectual property protection, technology transfers, industrial subsidies and other non-tariff barriers to trade.

China has repeatedly played down complaints about intellectual property abuses, and has rejected accusations that foreign companies face forced technology transfer.

Nearly halfway into the 90-day truce, there have been few concrete details on any progress made.

Gao did not address questions on what demands both sides raised, or if the United States had agreed to drop its plan to implement additional tariffs by the March 2 deadline.

In a brief statement earlier, the ministry said the talks were extensive, and helped establish a foundation for the resolution of each others’ concerns, but gave no details.

On Wednesday, the U.S. Trade Representative’s office (USTR) said officials from the two sides discussed “ways to achieve fairness, reciprocity and balance in trade relations”, and focused on China’s pledge to buy a substantial amount of agricultural, energy, manufactured, and other products and services from the United States”.

At stake are scheduled U.S. tariff increase on $200 billion worth of Chinese imports.

Trump has said he would increase those duties to 25 percent from 10 percent if no deal is reached by March 2, and has threatened to tax all imports from China if it fails to cede to U.S. demands.

U.S. officials have long complained that China has failed to live up to trade promises, often citing pledges to resume imports of American beef that took more than a decade to implement.

No schedule for further face-to-face negotiations was released after the talks. The USTR said the American delegation was returning to Washington to report on the meetings and “receive guidance on the next steps”.

Both sides agreed to maintain close contact, the Chinese commerce ministry said.

“For the next step, work teams from both sides will continue to work hard and push forward consultations as originally planned,” Gao said.

CORE ISSUES

Since the Trump-Xi meeting in Argentina, China resumed purchases of U.S. soybeans. Buying had slumped after China imposed a 25 percent import duty on U.S. shipments of oilseed on July 6 in response to U.S. tariffs.

China has also cut tariffs on U.S. cars, dialled back on an industrial development plan known as “Made in China 2025”, and told its state refiners to buy more U.S. oil.

Earlier this week, China approved five genetically modified (GM) crops for import, the first in about 18 months, which could boost its overseas grains purchases and ease U.S. pressure to open its markets to more farm goods.

Big spending on commodities and goods would send a positive signal on China’s intent to work with the United States, but would do nothing to resolve the U.S. demands that require difficult structural change from China.

China has said it will not give up ground on issues that it perceives as core.

One of the biggest challenges to any deal would be to ensure that China enforces whatever is agreed to stop technology transfers, intellectual property theft and hacking of U.S. computer networks.

The U.S. Trade Representative’s office said officials broached those topics and discussed the need for any agreement to include “complete implementation subject to ongoing verification and effective enforcement”.

The U.S. China Business Council, which represents American companies working in China, applauded the “substantive discussions” but urged both sides to make tangible progress on achieving equal treatment of foreign companies in China and changes to policies aimed at technology transfer.

The group also urged the removal of U.S. tariffs when China delivers on its promises.

Reporting by Yawen Chen and Martin Pollard in BEIJING and John Ruwitch and Josh Horwitz in SHANGHAI; Additional writing by Ryan Woo in BEIJING; Editing by Paul Tait & Shri Navaratnam

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