U.S. trade negotiators want to end China’s forced tech transfers. That could backfire.



Yu Zhou | The Washington Post

The Trump administration has been highly critical of “Made in China 2025” — Beijing’s 2015 strategic plan to upgrade the nation’s manufacturing industry and technology sector. With negotiations in the U.S.-China trade war set to resume this week in Washington, Made in China 2025 remains a central concern for the United States.

At the top of the list of U.S. demands in the new round is ending forced technological transfers. In China, this is called “Trade-Technology-for-Market” (市场换技术), a strategy devised by Deng Xiaoping in the early 1980s. The policy requires foreign companies in strategic sectors to form joint ventures with Chinese state-owned partners — and share their technology as a condition to gain access to the Chinese market.

While Made in China 2025 does not explicitly advocate this policy, the worry on the U.S. side is that such practices exemplify the Chinese approach to coerce foreign companies into helping Chinese competitors attain global dominance in vital industrial sectors. But what has been the actual track record of China’s Trade-Technology-For-Market, given its long history? Should foreign companies fear that their Chinese joint venture partners will become formidable competitors?

[Read more here.]