Is China Winning the Battle Against IP Violations?

Business, Technology, Internet and network concept. Young businessman working in the field of the future, he sees the inscription: intellectual property

China's new Foreign Investment Law has generally been welcomed with cautious optimism by the international business community as a step in the right direction in improving the protection of intellectual property rights in China. The new law bans forced technology transfer and illegal government “interference” in foreign business practices.

Forced technology transfers and IP infringements are key concerns of the U.S. government in its current trade negotiations between Washington and Beijing. Larry Kudlow, director of the National Economic Council for U.S. President Donald Trump, told Politico the new law is encouraging, saying “[it] will restrain any intellectual property theft and will also restrain any forced transfer of technology.” The American Chamber of Commerce in China has also broadly welcomed the new law, saying that in principle it welcomed and appreciates “this legislative effort to improve the foreign investment climate”.

The imposition of criminal penalties in the new law is seen as particularly significant. “The addition of language imposing criminal penalties for sharing sensitive foreign company information adopts a much tougher deterrent against counterfeiting and [intellectual property] theft and will offer new avenues for the enforcement of [intellectual property] protection,” said Jake Parker, vice president of China operations at the U.S.-China Business Council, in a statement.