On The Forced Technology Transfer In Sino-US Trade Dispute ——In Perspective Of Market Access

Since Trump took office,the US-Sino trade dispute has escalated.On March 22 nd 2018,the United States announced the “301 Investigation” report toward China,an important part of which was to accuse some relevant market access measures adopted by China of leading to forced technology transfer.Subsequently,on the basis of this report,USTR announced an additional 301 tariffs on China for 200 billion US dollars on September 18 th 2018,which led to the escalation of the trade dispute.The United States has always paid special attention to China’s intellectual property policies,so China has repeatedly been listed into the priority watch list of the “Special 301 Investigation”.That investigation also sheds light on the issue of technology transfer.It is useful to clarify the issue of technology transfer related to market access for refuting the relevant allegations from other countries and improving China’s technology transfer system.Chapter 1,the allegation of forced technology transfer in “301 Investigation” report.This chapter first analyzes the root reasons for focus on China’s technology transfer system from US.Transnational corporations,representing the interests of developed countries,actively seek technological monopoly and implement restrictive business practices in international trade,and China’s remarkable achievements under the innovation-driven development strategy in recent years threaten their interests.Due to strategic development considerations,the United States pays special attention to China’s intellectual property policies,including technology transfer.The “301 Investigation” report demonstrates that China’s relevant measures lead to forced technology transfer from two aspects: On the one hand,the report pointed out that the foreign ownership restrictions such as JV requirements and foreign equity limitations in China’s Catalogue of Industries for Guiding Foreign Investment are the cornerstone of its technology transfer regime,and the relevant policies of China in auto manufacturing,new energy vehicles and aviation are the obvious examples.On the other hand,the report also pointed out that there are a number of administrative reviews and licensing processes in China’s foreign investment regulations,which will not only force the disclosure of sensitive technical information,but also force the transfer of US companies’ technology by the combination with JV requirements.Chapter 2,the analysis of forced technology transfer from the perspective of international investment law.First,it is necessary to clarify China’s international obligations on technology transfer.TRIMS adopts a generalized and enumerated legislative approach,and whether the technology transfer requirement is within the scope of its prohibition is controversial.Developed countries,led by the United States,want to give more protections to investment,so when they sign investment agreements,they will try to eliminate fulfillment requirements as much as possible,and forced technology transfer requirement are prohibited.China has exceeded the provisions of TRIMS in the Protocol on the Accession of the People’s Republic of China and promise that the approval of foreign investment is not conditional on technology transfer,but it does not clarify whether it is forced or encouraging technology transfer.In light of the trends in current investment agreements,China should only assume the obligation that do not require forced technology transfer.According to the explanation in the international investment arbitration cases,the relevant measures can be considered “forced” only if there is a direct link between the host country’s measure and the investor’s behavior,what’s more the host country does not provide any alternative measures.The JV requirements,equity limitations and administrative approvals for foreign investment in China just belong to the market access system.There is no sufficient evidence in the “301 Investigation” report to prove that these measures have a direct link with forced technology transfer.And the Chinese government also provides alternative investing methods,and the technology-for-market is the independent choice of the foreign investors.Therefore,China’s relevant measures will not lead to the consequence of forced technology transfer.Chapter 3,suggestions for China’s technology transfer system.In view of the current change in China’s investment status,China should not only continue to improve the rules of domestic technology transfer,but also actively participate in the formulation of international technology transfer rules.At the domestic level,China should gradually relax the JV requirements,equity limitations and administrative approval requirements for foreign investment,and remove the unreasonable provisions in the Regulations of the People’s Republic of China on the Administration of the Import and Export of Technologies and the Regulations for the Implementation of the Law of the People’s Republic of China on Chinese-Foreign Equity Joint Ventures.Fortunately,the introduction of the Foreign Investment Law and its related rules is an opportunity to properly solve these problems.At the international level,on the one hand,China must strictly limit the scope of forced technology transfer and allow the encouraging technology,on the other hand,China should also include exceptions such as the intellectual property protection and environment protection from its own interests,in order to solve some domestic problems involving the public interest.In addition,it’s significant to improve relevant rules of the ISDS mechanism for protecting our investors’ intellectual property investment due to the great risks faced by them under the “Belt and Road” initiative.