More European firms forced to transfer technology in China, Latest Business News - The New Paper

More European firms forced to transfer technology in China

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BEIJING Cases of European firms forced to transfer technology in China are increasing despite Beijing saying the problem does not exist, a European business lobby said, adding that its outlook on the country's regulatory environment is "bleak".

China's trading partners have long complained that their companies are often compelled to hand over prized technology in exchange for access to the world's second-largest economy.

The European Union Chamber of Commerce in China said yesterday that results from its annual survey showed 20 per cent of members reported being compelled to transfer technology for market access, up from 10 per cent two years ago.

Nearly a quarter of those who reported such transfers said the practice continues, while another 39 per cent said the transfers had occurred less than two years ago.

"Unfortunately, our members have reported that compelled technology transfers not only persist, but that they happen at double the rate of two years ago," European Chamber vice-president Charlotte Roule said about the survey.

"It might be due to a number of reasons... Either way, it is unacceptable that this practice continues in a market as mature and innovative as China," Ms Roule said.

In certain "cutting edge" industries the incidence of reported transfers was higher, such as 30 per cent in chemicals and petroleum and 28 per cent in medical devices, she added.

The EU is also increasingly frustrated by what it sees as the slow pace of economic opening in China, even after years of granting China almost unfettered access to EU markets.

The majority of European firms in the survey said their business strategies were not changed by the US-China trade war, though it was completed by 585 respondents in January and February, before the latest tariff increases.

The chamber added that members had a "bleak outlook" on China's regulatory environment, with 72 per cent of members saying they expected obstacles to increase or stay the same in the coming five years, even as the Chinese government has vowed continued reform and opening. - REUTERS