Compulsory Technology Transfer Is a Ridiculous Lie

In the midst of trade conflicts, the United States often demands that China cease its policy of compulsory technology transfer. Some uninformed Americans believe that China’s rapid high-tech development is based solely on copying U.S. technology, and even some Chinese citizens are fully convinced of this, despite their lack of knowledge of the industry.

It is undeniable that technological development will always be based on collective learning. Thirty years ago, the U.S. was the leader in technological development and China had to learn from the U.S. It is only possible to achieve true innovation through continuous learning and gradual improvement. However, regarding this process, China does not maintain a national policy of compulsory technology transfer, and it does not mandate that foreign companies transfer technology to Chinese enterprises.

So, have foreign enterprises transferred technology to Chinese companies? Of course, because that is a mutually beneficial practice between business partners. For example, Siemens once supported China in developing Time Division-Synchronous Code Division Multiple Access technology. Siemens originally also worked on TD technology, but it could not find European supporters for the project. As a result, Siemens could only achieve Frequency Division Duplex technology. The research that went into the original TD technology would have largely been wasted, so Siemens was willing to share this technology in cooperation with Chinese companies.

As we all know, Nokia and Shanghai Bell have established a new joint venture to develop communication system equipment, which includes 5G technologies and products. Will there be technological cooperation? To a large extent in this new company, technology is integrated and transferable. This company now owns a great deal of intellectual property and many new technologies. If the technology and information is inaccessible to parties when they establish a joint venture, how can the companies truly integrate? How can they best integrate all the strengths of each company into one family?

As Chinese companies have grown, they have accepted the costs of acquiring intellectual property rights when they go abroad and face international markets. Huawei is one of Qualcomm’s most important customers in China. Every year, Huawei purchases a huge number of Qualcomm chips and pays Qualcomm an incredible amount of money for intellectual property fees. The American politicians who accuse China of compulsory technology transfer will certainly pretend they have never seen this case. In today’s globalized economy, it is standard practice for Chinese and foreign companies to conduct intellectual property negotiations. As for violations of intellectual property rights, it has already become standard to resolve disputes through the legal system. If a Chinese company infringes on the intellectual property rights of a foreign company, the foreign company can report it to the Chinese intellectual property management agency or file a lawsuit in court.

Currently, the majority of products that American companies sell in China are electronic information products; for example, chips, software, servers and routers. Chinese companies conduct exchanges and cooperate not only with many American companies, but also with world famous telecommunication companies such as Intel, Motorola, Lucent, Nortel, Ericsson, Nokia and Siemens. In the process of bidding and evaluating projects, there have been no complaints from senior executives of foreign companies that cooperating with Chinese companies requires them to share technological information, and there is no cooperative project that makes this a requirement.

Those who say China requires foreign companies to share technology with Chinese companies have no proof. All of their assertions are empty and meaningless. The so-called compulsory technology transfer mandated by the Chinese government is just a ridiculous lie made up by American politicians. Anyone with a basic understanding of the technology industry will discover just how unfounded these lies are.