China vows to ease investment curbs, won't force tech transfers

October 30, 2019 08:03
Vice Minister of Commerce  Wang Shouwen said China will move faster to open up the financial industry. Photo: AFP

China will eliminate all restrictions on foreign investments not included in its self-styled “negative lists” and also will “neither explicitly nor implicitly” force foreign investors and companies to transfer technologies, Vice Minister of Commerce  Wang Shouwen said, signaling possible upcoming directives.

Technology transfers have been a major source of tension between China and the United States, which have been embroiled in a trade war for over a year.

The "negative lists" specify industries in which investors, foreign or domestic, are restricted or prohibited.

“We will move faster to open up the financial industry,” Wang said on Tuesday, eliminating all restrictions on the scope of business for foreign banks, securities companies and fund managers.

Policies will also be fine-tuned to ensure foreign and domestic players have equal market access to manufacturing new-energy vehicles, he said.

The new measures are intended to ensure stable foreign investment and create a transparent, predictable investment environment, Wang said.

The US-China Business Council said forced technology transfer requirements and investment restrictions that required joint ventures were a concern for many of its more than 200 member companies.

“We are encouraged by the vice minister’s statement on eliminating forced technology transfer requirements in the China market,” said Jake Parker, the group’s senior vice president.

“We look forward to these new liberalizations quickly resulting in transparent regulatory reviews that lead to licenses granted after narrowly defined review timelines.”

Chief US and Chinese trade negotiators talked on the phone recently and will speak again soon, Geng Shuang, China’s Foreign Ministry spokesman, told a separate news conference. He did not give a timeframe.

US President Donald Trump agreed this month to cancel an Oct. 15 hike in tariffs on US$250 billion in Chinese goods as part of a tentative agreement on agricultural purchases, increased access to China’s financial services markets, better protections for intellectual property rights and a currency pact.

Leaders of the world’s two biggest economies are working to agree on the text for a “Phase one” trade agreement announced by Trump on Oct. 11.

Trump has said he hopes to sign the deal with China’s President Xi Jinping next month at a summit in Chile, but a US administration official said on Tuesday the text of the deal might not be completed in time.

“If it’s not signed in Chile, that doesn’t mean that it falls apart. It just means that it’s not ready,” the administration official said. “Our goal is to sign it in Chile. But sometimes texts aren’t ready. But good progress is being made and we expect to sign the agreement in Chile.”

White House spokesman Judd Deere said both sides were still working to complete work on the interim deal. Reuters

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