China Fails to Change Unfair Policies - USTR

The Trump administration on Tuesday said that China has failed to change its “unfair” at the heart of the US-China trade conflict, adding to the frictions ahead of a high-stakes meeting later this month between US President Donald Trump and Chinese President Xi Jinping.

The findings were released in an update of the US Trade Representative’s “Section 301” investigation into China’s intellectual property and technology transfer policies, which sparked US tariffs on $50 billion worth of Chinese goods that later ballooned to $250 billion.

“We completed this update as part of the Administration’s strengthened monitoring and enforcement effort,” said US Trade Representative Robert Lighthizer in a statement. “This update shows that China has not fundamentally altered its unfair, unreasonable, and market-distorting practices that were the subject of the March 2018 report on our Section 301 investigation.”

In the update, USTR said that it had found that China had not responded “constructively” to the initial section 301 reports and failed to take any substantive actions to resolve or acknowledge US concerns. It also added that the Asian country had made clear that it would not change its policies in response to the initial investigation.

USTR said that China was continuing its policy and practice of conducting and supporting cyber-enabled theft of US intellectual property and was continuing discriminatory technology licensing restrictions.

The update said that in spite of the relaxation of some foreign ownership restrictions, “the Chinese government has persisted in using foreign investment restrictions to require or pressure the transfer of technology from US companies to Chinese entities.”

China’s Commerce Ministry did not respond to requests for comments.

Foreign Ministry spokesman Geng Shuang said that China had already offered a detailed response to the US complaints in a government white paper that was issued in September.

“I recommend the US-side read it in detail,” he told a daily news briefing in Beijing.

He also added that the essence of China-US trade and economic cooperation is mutual benefit.

“It’s normal for there to be friction in economics and trade. What’s key is to have dialogue and consultation on the basis of mutual respect, equality, and sincerity,” Geng said without further elaboration.

The report comes as the Trump administration and top Chinese officials are discussing possible ways out of the G20 leaders’ summit in Buenos Aires at the end of November.

However, acrimonious trade rhetoric between the governments of the world’s two largest economies has been increasing in recent days, spilling over into an Asia-Pacific Economic Cooperation (APEC) summit last weekend.

A top Chinese diplomat said on Tuesday that the failure of APEC officials to agree on a communiqué from the summit was a result of certain contries “excusing” protectionism, a veiled criticism of Washington’s tariffs.

US Vice President Mike Pence said on Saturday that the United States would not back down from the trade dispute, and might double the tariffs, unless Beijing complied to US demands.

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