Recently, the so-called "China's use of joint venture requirements, share ratio restrictions and other foreign investment restrictions to force foreign companies to transfer technology (compulsory technology transfer)" has become the main reason the United States and Europe accuse China of using unfair means to restrict foreign companies.

The accusation is unfounded, ignoring the efforts China made in establishing and improving the intellectual property system and encouraging innovation and creation since China's reform and opening up.

It is a denial of property rights and credit consciousness, a denial of the spirit of contract, a denial of the market laws, reflecting a Cold War mentality and the ulterior motives of some countries.

It must be noted that China is not the destroyer of internationally accepted intellectual property rules, but the defender, promoter and beneficiary of them.
The ability and achievements of Chinese companies in independent innovation today benefit from the Chinese government's protection of intellectual property rights and encouragement of innovation, rather than the destruction of rules and the theft of technology from other countries.

This accusation violates the basic facts.

Since the establishment of special economic zones in the reform and opening up, China has attracted foreign investment as one of its most important open policies.
During the initial stage of reform and opening up, most of the technology and core equipment of the processing trade came from foreign countries. China participated in the international industrial chain through the lowest end of processing trade.
Later on, as the demands of the market grew, core technologies in the fields of automobiles, aviation and navigation were introduced to China, and companies like XCMG Construction Machinery and Sany Heavy Industry bloomed. In this process, the Chinese government never signed any agreement forcing a technology transfer.

Even though in some cases foreign companies willingly transferred their technology to break into Chinese market, they claimed fees for the patent and transfer. Therefore no case should be seen as exchanging technology for the market.

So far, the Ministry of Commerce of China has never received a single report on China's violation of laws, contracts and agreements by forcing foreign parties to transfer technology from the chambers of commerce of the United States, Europe, Japan, or South Korea that are based in China.

In this regard, China has always been a loyal player abiding by the rules of the game.

Several European and US enterprises moved their factories from China to other Southeast Asian countries. This is the result of redistribution trend of global industrial chain, not of the so-called China theft and forced transfer of core technology.

Noting China's growing position in the industrial chain, some companies, politicians and scholars with a Cold War mindset tried to crack down on China's independent innovation in the name of intellectual property protection. Their accusations are groundless.

In essence, China always held three attitudes toward intellectual property rights.
First, China is a responsible country that values intellectual property rights. The government and enterprises did not and will not force technology transfer during negotiations. If any, please present the evidence.

China has always attached great importance to the protection of intellectual property rights. After joining the WTO, great efforts have been made in the construction of intellectual property system, and nearly seven thousand or eight thousand documents, policies or measures that are not consistent with the WTO rules have been canceled.

The State Intellectual Property Office has recently proposed to further enhance the protection of intellectual property rights from four aspects: firstly, take the reform as an opportunity to actively guide the comprehensive law enforcement of patent and trademark; secondly, speed up the establishment of a punitive compensation system for infringement with the revision of the patent laws; thirdly, take the construction of an IPR protection center as an opportunity and speed up the establishment of a more convenient, efficient and low-cost way of safeguarding IPR; fourthly, take the 40th anniversary of reform and opening up as a turning point, deepen the international cooperation on intellectual property, and promote the construction of more open and inclusive international rules of IPR.

After decades of efforts, China has gradually improved the legal system of intellectual property rights, and based on these legal foundations to actively enforce the law enforcement of intellectual property rights, while attaching importance to the combination of foreign trade and intellectual property system.
These efforts have made tremendous contributions to promoting China's technological progress and innovation, and creating a favorable investment and business environment for Chinese and foreign enterprises.

In this process, the quality and efficiency of China's foreign trade has been improved. Through the emphasis on intellectual property, the independent brand innovation has been promoted. By strengthening the construction of the intellectual property system, the independent innovation ability and core competitiveness of the enterprises are boosted.

For example, the number of patent and trademark applications in China has been the largest in the world for many years. The core intellectual property rights are formed in the industries of high speed rail, nuclear power and the new generation of mobile communications. These achievements are inseparable from the protection of intellectual property rights.

Therefore, China is the beneficiary of intellectual property protection. The improvement of independent innovation ability of Chinese enterprises is largely due to the improvement of China's intellectual property protection system, rather than the destruction of the intellectual property system and the plundering of other countries' technology.

Ulterior motives are harbored by those who deliberately ignore these efforts and achievements.

Second, the protection of intellectual property rights is out of China's own development needs, not the requirements of Europe and the United States.
China is calling on the public to start an undertaking and make innovations, taking the protection of intellectual property rights as a prerequisite for safeguarding independent innovation and encouraging high-tech invention and progress.

China has been committed to creating a legal environment conducive to technological innovation.

On the one hand, relevant departments closely cooperate to combat the infringement acts in the business field and safeguard t intellectual property rights. On the other hand, the regulation and management of intellectual property protection is strengthened, a fair environment created for the development of innovative activities.

China has its own timetable and roadmap of reform and opening up. It will become a powerful country in intellectual property protection. China will create the best business environment in the world, and the foreign companies investing in China have nothing to worry about in this area.

Third, in recent years, the Chinese government has reduced the legal threshold for the infringement of intellectual property law, established a number of cross-provincial intellectual property courts, set up a specialized commodity inspection team, carried out institutional reform to the industry and commerce quality inspection department and further strengthened market management. Through the acts, the government is determined to strengthen the protection of intellectual property rights by law and respond to the unjustifiable accusations from  Europe and the United States.

In reality, some enterprises do hope to get access to the technology when they sign a contract with foreign parties, and the foreign parties are willing to open up the Chinese market. The act of signing the agreement in the contract is a voluntary behavior between the two parties guided by the market laws.

There are similar agreements abroad, such as BOSCH cars in South America, who also transferred technology to open up the market. But the main point is that the technology transferred is neither the core nor high-tech.

The Chinese government has long recognized that the unswerving protection of intellectual property is the need of the times to conscientiously fulfill the international obligations, and it is the inherent need for our country to promote the development of the high-quality economy. To protect intellectual property rights is to encourage innovation.

The Outline of National Intellectual Property Strategy has been implemented for ten years. At present, the country is organizing the evaluation work. The members of the assessment expert group agree that the past ten years have witnessed historic changes in the development of intellectual property rights in China. Intellectual property rights are the important support to China's economic competitiveness and to the national security.

Of course, new occasions have emerged in the new era. With the continuous advancement of the internet, big data and other industries, the construction of intellectual property protection system must follow the pace of the times.
While the intellectual property protection system of traditional industries is further consolidated, that of emerging industries such as big data also needs to be strengthened urgently.

For example, the protection of business model innovation is still insufficient in both the macro and micro level. A subject remained to be discussed is how to combine the content, data, technology, privacy and other factors and how to consider the problem of intellectual property protection in new industries comprehensively in the future.

It is worth mentioning that the Central Committee is determined to promote the system construction of intellectual property protection, and the country will use the facts and achievements to prove the commitment of China's protection of intellectual property in response to the US side.

In the next 40 years, China will adhere to the reform and opening up, learn from the advanced technology of other countries, and improve the market economy system through the multilateral scheme and the rules and regulations of WTO, so that a more transparent and orderly market is expected.

At the same time, Chinese enterprises should strengthen independent innovation, protect intellectual property rights in accordance with the law, so that the mass innovation and entrepreneurship can blossom in this land.

Wei Jianguo is vice-chairman of the board at the China Center for International Economic Exchanges and a former vice-minister of commerce. The views expressed do not necessarily reflect those of China Watch.

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