Business World

Tuesday 17 September 2019

Trump Administration says China has failed to alter 'unfair, unreasonable' trade practices

China's leader Xi Jinping
China's leader Xi Jinping

David Lawder

The Trump administration on Tuesday said that China has failed to alter its "unfair" practices at the heart of the US-China trade conflict, adding to tensions ahead of a high-stakes meeting later this month between US President Donald Trump and Chinese President Xi Jinping.

The findings were issued in an update of the US Trade Representative's "Section 301" investigation into China's intellectual property and technology transfer policies, which sparked US tariffs on $50bn worth of Chinese goods that later ballooned to $250bn.

"We completed this update as part of this Administration's strengthened monitoring and enforcement effort," US Trade Representative Robert Lighthizer said in a statement.

"This update shows that China has not fundamentally altered its unfair, unreasonable, and market-distorting practices that were the subject of the March 2018 report on our Section 301 investigation."

In the update, USTR said it had found that China had not responded "constructively" to the initial section 301 reports and failed to take any substantive actions to address US concerns. It added that China had made clear it would not change its policies in response to the initial investigation.

USTR said that China was continuing its policy and practice of conducting and supporting cyber-enabled theft of US intellectual property and was continuing discriminatory technology licensing restrictions.

The update said that despite the relaxation of some foreign ownership restrictions, "the Chinese government has persisted in using foreign investment restrictions to require or pressure the transfer of technology from US companies to Chinese entities."

China's Commerce Ministry did not immediately respond to a request for comment.

Foreign Ministry spokesman Geng Shuang said China had already offered a detailed response to the US complaints in a government white paper issued in September.

"I recommend the US side read it in detail," he told a daily news briefing in Beijing.

The essence of China-US trade and economic cooperation is mutual benefit, he added.

"It's normal for there to be friction in economics and trade. What's key is to have dialogue and consultations on the basis of mutual respect, equality and sincerity," Geng said, without further elaborating.

The report comes as the Trump administration and top Chinese officials are discussing possible ways out of their trade war and negotiating details of the Trump-Xi meeting on the sidelines of the G20 leaders summit in Buenos Aires at the end of November.

But acrimonious trade rhetoric between the governments of the world's two largest economies has been increasing in recent days, spilling over into an Asia-Pacific Economic Cooperation (APEC) summit last weekend.

A top Chinese diplomat said on Tuesday that the failure of APEC officials to agree on a communique from the summit was a result of certain countries "excusing" protectionism, a veiled criticism of Washington's tariffs.

US Vice President Mike Pence said on Saturday that the United States would not back down from the trade dispute, and might even double tariffs, unless Beijing bowed to US demands.

Reuters

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