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US firms want tougher policies to deal with Chinese companies

The US will investigate whether China’s intellectual property policies constitute unfair trade practices. That would pave the way for the US to impose sanctions on Chinese exporters or to further restrict transfer of advanced technology to Chinese firms. American business groups want their country to take a tougher trade line with China. They feel not much attention has been given to areas like intellectual property.

Discontent has intensified as China’s economy continued to expand and its computer and software sectors become bigger competitors internationally. Western firms fear China will use the regulations to bar foreign investments in areas that China targets for investment, including semiconductors, advanced machine tools and artificial intelligence.

China has a law requiring foreign companies to place data centers in China, find Chinese partners and transfer technology to the joint ventures. China says she is protecting herself from efforts by western intelligence services to tap into Chinese computer systems. But foreign businesses say this amount to surrendering their brand and operating control in order to do business.

However, US companies that want to keep their most advanced technology from Chinese hands would probably back a move to be tough on China while others that want to license technology to Chinese firms could find any such measures a hindrance.