Technology

China agrees to stop forcing foreign companies to transfer their technology to Chinese companies

Will foreign companies operating in China still have to hand over their tech to the Communist Party?

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China agrees to stop forcing foreign companies to transfer their technology to Chinese companies and agrees to “address” intellectual property theft concerns, as part of the Phase One Trade Agreement with China.

“For the first time in any trade agreement, China agreed to end its practice of forcing foreign companies to transfer their technology to Chinese companies in order to gain market access,” the White House announced today.

Additionally, “China will address numerous longstanding intellectual property concerns in the areas of trade secrets, trademarks, enforcement against pirated and counterfeit goods, and more.”

China’s intellectual property theft has plagued both the public and private sector for years, but saying it will “address” the concerns doesn’t mean it will do anything about it.

Siphoning data and technology through both legal and illegal is China’s modus operandi, but at least the Communist regime committed to addressing the problem, on paper if nothing else.

As for stopping the practice of forcing foreign companies to transfer their technology to Chinese companies, the White House memo didn’t mention if that was true for forcing foreign companies to transfer their technology to the Chinese government itself.

For example, will foreign companies operating in China, but not working with another Chinese company, still be forced to hand their technology over to the Communist Party, which in turn would hand it over the People’s Liberation Army?

Under Chinese law the Communist government can access data from any company operating in China. This goes for both foreign and domestic companies.

“All companies—including foreign-owned companies—must arrange and manage their computer networks so that the Chinese government has access to every bit and byte of data that is stored on, transits over, or in any other way touches Chinese information infrastructure,” Heritage Foundation Senior Fellow Klon Kitchen testified in a Senate hearing last November.

As for Chinese companies, they all have to give their technology to government.

Pompeo to Silicon Valley: ‘Don’t let China use American tech to power Orwellian surveillance state’

“Even if the Chinese Communist Party gives assurances about your technology being confined to peaceful uses, you should know there is enormous risk — risk to America’s national security as well” — Secretary of State Mike Pompeo to Silicon Valley

Secretary of State Mike Pompeo said on Monday, “Under Xi Jingping, the CCP has prioritized something called ‘Military-Civil Fusion.’ It’s a technical term but a very simple idea. Under Chinese law Chinese companies and researchers must, I repeat — MUST — under penalty of law share technology with the Chinese military,”

“The goal is to ensure that the People’s Liberation Army has military dominance. And the PLA’s core mission is to sustain the Chinese Communist Party’s grip on power.

“That same Chinese Communist Party that has led China in an increasingly authoritarian direction — and one that is increasingly oppressive as well. It runs completely at odds with the tolerant views that are held here in this area and all across America.”

With the signing of Phase One of the China Trade Agreement today, at least foreign companies don’t have to share their tech with Chinese ones, and the tech isn’t supposed to go towards Military-Civil Fusion.

It remains to be see if there will be loopholes or workarounds that force foreign companies to hand over their technology to the Communist Party.

“An Orwellian surveillance state”

And let’s not forgot what China does with the technology it “acquires.”

Forced facial scanning of all citizens registering mobile phones, DNA phenotyping to profile an entire ethnic population for identification and detention, predictive policing by algorithm, massive surveillance of Uyghurs and protesters, as well as censorship are just some of the many abuses Communist China is perpetrating against its own people, according to media reports old and new.

Pompeo warned a Silicon Valley crowd about the risks involved in doing business with China, and he said that US companies can still work with China, but they have to be smart and keep American values at heart.

“Even if the Chinese Communist Party gives assurances about your technology being confined to peaceful uses, you should know there is enormous risk — risk to America’s national security as well,” he said.

Pompeo warned that “the Chinese Communist Party has led China in an increasingly authoritarian direction — and one that is increasingly oppressive as well.

“It runs completely at odds with the tolerant views that are held here in this area and all across America.”

5 ways China weaponizes tech against its own citizens, warning signs: Op-ed

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Tim Hinchliffe
Tim Hinchliffe is the editor of The Sociable. His passions include writing about how technology impacts society and the parallels between Artificial Intelligence and Mythology. Previously, he was a reporter for the Ghanaian Chronicle in West Africa and an editor at Colombia Reports in South America. tim@sociable.co