Macao Daily News:
The United States has repeatedly accused the Chinese government of compulsory technology transfer. What is your comment? Thank you.
Wang Shouwen:
Thank you for your question. The White Paper explains this issue. I will do some more reading here. Regarding the so-called "compulsory technology transfer," we must first make it clear who is forcing who.
In all Chinese laws, regulations and policy documents, foreign enterprises are not forced to transfer any of their technology to Chinese companies. I challenge you to really find any such provisions in any documents, and if you do so, please let me know. Moreover, in order to prevent government agencies from exerting pressure on foreign enterprises and requiring them to transfer technologies to Chinese enterprises, this year, the State Council also issued a special instruction asking governments at all levels not to use administrative measures to force any such technology transfer.
When foreign companies export products to China, the Chinese door is open and there are no obstacles. If they want to sell their technologies to China, that is completely voluntary and there are no obstacles. Some companies now say that, when they want to invest in China, the Chinese government asks them to transfer technologies. Let's look more closely at this claim, and make it clear that foreign companies can invest in China and establish wholly-owned enterprises in most areas. There is no issue of technology transfer in establishing wholly-owned enterprises.
Everyone can check our negative list of foreign investment and find that fewer and fewer industries now require joint ventures. There are, indeed, only a small number of industries that require Sino-foreign joint ventures. This requirement was accepted by the U.S., Europe, Japan and other WTO members in the negotiations for China to join the WTO.
As a result of the negotiations, China has the right to require the joint venture approach for the entry of foreign capital in certain specified industries. This is recognized by everyone. It's not only China that does this; developed countries also have such requirements, and a large number of developing countries have such demands. If you want to invest here, produce products, and meet the demands of the local market, you need to make a joint venture.
Let's then take a look at the joint venture: is it asking for a compulsory technology transfer? Some companies say they have to transfer technologies when they form the joint venture, and if they don't do so, nobody will be willing to join them in a business, so this is a compulsory transfer. We say this is not the fact. When you are negotiating a joint venture, you definitely want a good price. If you have technologies, you can get a good price. If you don't have a good price, you will lose money and you will not agree to transfer the technologies.
Who are the parties negotiating this good price? They are foreign enterprises and Chinese partners. They are equal market entities. Negotiations between equal civil entities is a contract-based negotiation. It is a free choice of enterprises. It is an equal consultation and negotiation of enterprises. The government does not play any role in it. The government has no compulsory influence. In fact, many joint ventures are developing very well in China. Ford's joint ventures in China produces more cars than its American plants. Ford's profits in China exceed its profits in the United States.
The Deputy Director of the National Intellectual Property Administration, Mr. He Hua, just mentioned that China's protection of intellectual property rights is highly praised by joint ventures with their satisfaction degree in some cases being more than 80 percent; so, how can you say this is compulsory?
Some people ask, can you waive the joint venture requirements? Let me tell you, we are doing more and more to waive the joint venture requirements. This year, we have timetables for the national negative list and the negative list of the free trade pilot zone to waive requirements for the joint ventures handling the manufacture, maintenance and design of automobiles, aircraft and ships, as well as waive the joint venture requirements for finance, securities, banking, and insurance. However, as far as joint venture requirements are concerned, not only China has them, but other developed countries and developing countries have them, too. We need to negotiate within the WTO framework, and we need to resolve these issues through bilateral free trade negotiations or investment agreement negotiations. Don't use compulsory technology transfer as an excuse to initiate a trade war. This excuse is wrong.
At the same time, I would especially remind everyone that when it comes to "compulsory," some countries now engage in a so-called compulsory technology transfer ban. For example, they impose export restrictions and refuse to export some products and some technologies. This involves government orders and government laws and regulations. This is called compulsory. When enterprises want to sell products to China, or want to sell technologies to China, their government does not allow it. When Chinese companies go to invest in such country, or to acquire a company there, the company is willing to accept such a sale, but the government does not allow it, the laws do not allow it. So, I want to draw your attention to the compulsory technology transfer ban. Thank you.
