China Plans to End Forced Tech Transfers, Officials Say

China plans to eliminate restrictions on some foreign investments and hopes to continue addressing the issue in future trade negotiations, Chinese officials said during an Oct. 29 press conference, according to an unofficial translation.

During the press conference, in which China said it is adopting a series of “opening up measures,” Ye Wei, head of China’s foreign investment department, said China plans to end forced technology transfers. “The administrative organs and their staff members may not enforce the transfer of foreign investors or foreign-invested enterprises through administrative licensing, supervision and inspection,” Ye said.

Vice Minister of Commerce Wang Shouwen said China is “supporting liberalization and facilitation in the investment field” and disputed claims that China bans foreign investment in some industries. “Although China has restrictions on some sensitive industries due to development and national security considerations, this is also the case in other countries,” he said. “If these restrictions are necessary, it is understandable. If it exceeds the necessary level, it constitutes an obstacle to investment access, which is not conducive to the liberalization and facilitation of investment.”

Wang also said China wants to discuss the issue with countries during trade negotiations. “I believe that bilateral trade agreements can be used to solve this problem,” he said. “If the investment agreement negotiations are used to resolve their concerns about investment access, this will help to liberalize and facilitate investment, which is beneficial to all participating countries … . President Xi Jinping has repeatedly stressed that the door to China's opening will be more and more open.”

The announcement came as the U.S. prepares final regulations for its own set of foreign investment rules through the Foreign Investment Risk Review Modernization Act (see 1910180026). The changes also directly relate to some of the obstacles at the heart of a U.S.-China trade deal, including U.S. concerns over China’s forced technology transfers and the theft of intellectual property rights.