China steals the “crown jewels” of American technology

Tuesday 3 July 2018


The white house accuses China of stealing American technology. That’s how they mean it’s done.

Donald Trump has been awkward about how to stop China stealing American technology. It was expected that a final decision came before Saturday, but instead he accused the EU of stealing as much as China.

Until recently, there have also been no concrete allegations about how China steals technology.

Now the White House has published a 36-page report on five ways.

1. Theft

China is supposed to literally steal intellectual property through physical theft and hacking.

China’s response to the CIA, the Ministry of State Security, will be behind many of the thefts.

According to the report, a Florida woman was sentenced to smuggle submarine parts from American companies to a Chinese university affiliated with the Chinese Navy.

2. Legislation

Arne Melchior is researching international trade in NUPI. He holds a doctorate in economics from the University of Oslo.

The laws in China make it difficult for foreign companies to retain their technology for themselves. For example, strict requirements are imposed on companies that establish themselves in the country.

“There is some truth in Trump’s charges, and the EU has raised criticism of China on some of the same points. Among other things, companies that establish themselves in China through a merger with a local company, joint ventures, are often forced to transfer their knowledge to them, says senior researcher Arne Melchior at the Norwegian Foreign Policy Institute (NUPI) to E24.

3. Capture

China is the world’s largest producer of raw materials used in the production of high-tech products. The authorities have introduced export restrictions on a number of these materials.

Export restrictions may force companies using these raw materials to move their production to China, according to the report.

4. Information retrieval

The white house accuses China, among other things, of affecting Chinese people working with technology in the United States to retrieve information for them.

For example, it is suggested that the Chinese phone manufacturer Huawei collaborates with the University of California, Berkeley, about artificial intelligence to see how the technology can be used militaryly.

5. Investments

China plans to become world leader in a number of technology fields by 2025, the so-called “Made in China 2025” plan. They invest heavily in companies in line with this plan and facilitate the regulation of these sectors.

The report explains that this is problematic because companies that benefit from this policy are more susceptible to control by Chinese authorities.

– Trump already has the gear he needs

Melchior believes Trump does not necessarily have to go to trade war, as he has threatened and partially introduced, to bend with China. There are already systems for this in the World Trade Organization (WTO).

– Trump has criticized the WTO for failing to deal with China. But the WTO has introduced the so-called TRIPS agreement after American pressure, to secure intellectual property, thus giving Trump the tools he needs. The United States has appealed to China for WTO on the basis of the agreement, but chose to introduce 25 per cent duty on goods worth $ 50 billion before the negotiations were completed, explains Melchior.

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