|Box 1: China's technological innovation is based on self reliance. Accusing China of intellectual property theft and forced technology transfer is utterly unfounded.|
China is an innovative and diligent nation. It has created a highly sophisticated civilization and contributed significantly to human progress over the course of 5,000 years. Since the founding of the People's Republic in 1949, and in particular since the beginning of reform and opening up in 1978, China's scientific and technological undertakings have passed through a series of phases. They started from a difficult beginning, forged ahead in the course of reform, and have now achieved multiple breakthroughs featuring a variety of innovations. These achievements have won worldwide recognition. Historical records confirm that China's achievements in scientific and technological innovation are not something we stole or forcibly took from others; they were earned through self reliance and hard work. Accusing China of stealing intellectual property to support its own development is an unfounded fabrication.
China is fully committed to intellectual property protection. It has established a legal system for the protection of intellectual property that is consistent with prevailing international rules and adapted to China's domestic conditions. China values the leading role of judicial measures in protecting intellectual property, and has achieved impressive result s. The understanding of the importance of intellectual property among the general public and business community in China has increased, the value of royalties paid to foreign rights holders has risen significantly, and the number of intellectual property applications and registrations has surged.
The effective impact of China's intellectual property protection has won broad international recognition. Former WIPO Director General Arpad Bogsch spoke highly of China's legal framework for intellectual property protection, noting that China's achievements are "unmatched in the history of intellectual property protection". The US Chamber of Commerce recognized that China is making concrete progress in creating an intellectual property environment appropriate to t he 21st century. 1 In its 2018 China Business Climate Survey Report, the American Chamber of Commerce in China noted that among the main challenges facing its member companies operating in China, concern over intellectual property dropped from 5th place in 2011 to 12th place in 2018. An article in The Diplomat predicted that China will become a leader in global intellectual property. Many of the concerns raised by foreign firms doing business in China have already been addressed through judicial reform and a strengthened enforcement mechanism.
Respecting the laws of the market economy, China has been actively improving the policy system for innovation, continuously increasing investment in research and development, accelerating the development of innovators, and strengthening international cooperation on technological innovation in an all round way. In terms of some key innovation indices, China is already among the world's leading players. As China continues to witness a series of major scientific and technological achievements, its industries are gravitating toward the middle and high end, and the country's international influence is markedly increasing. In 2017, total R&D investment in China reached RMB1.76 trillion, ranking second in the world. The number of patent applications reached 1.382 million, ranking No. 1 in the world for the seventh consecutive year. The number of invention patents granted reached 327,000, up by 8.2 percent year on year. China ranks third in the world in terms of valid invention patents held. 2
China has always pursued international technical cooperation with mutual benefit and win win as the basic value orientation. China's economic development has benefited from international technology transfer and dissemination. International h olders of technology have also reaped enormous benefits from this process. China encourages and respects voluntary technical cooperation between Chinese and foreign firms based on market principles. It strongly opposes forced technology transfer and takes resolute action against intellectual property infringement. Accusations against China of forced technology transfer are baseless and untenable.
|Box 2: The Chinese and American economies are interlinked, and bilateral trade and investment are mutually beneficial China|
China and the US are each other's largest trading partner and important source of investment. In 2018, bilateral trade in goods and services exceeded US$750 billion, and two way direct investment approached US$160 billion. China US commercial cooperation has brought substantial benefits to both countries and both peoples.
According to China Customs, the trade in goods between China and the US grew fro m less than US$2.5 billion in 1979 when the two countries forged diplomatic ties to US$633.5 billion in 2018, a 252 fold increase. In 2018, the US was China's largest trading partner and export market, and the sixth largest source of imports. According to the US Department of Commerce, in 2018 China was the largest trading partner of the US, its third largest export market, and its largest source of imports. China is the key export market for US airplanes, soybeans, automobiles, integrated circuits and cotton. During the ten years from 2009 to 2018, China was one of the fastest growing export markets for American goods, with an annual average increase of 6.3 percent and an aggregate growth of 73.2 percent, higher than the average growth of 56.9 percent represented by other regions in the world. 3
Trade in services between China and the US is flourishing and highly complementary. The two countries have conducted extensive, in depth, and mutually beneficial cooperation in tourism, culture, and intellectual property. China is the largest destination for US tourists in the Asia Pacific and the US is the largest overseas destination for Chinese students. According to Chinese figures, two way trade in services rose from US$27.4 billion in 2006, the earliest year with available statistics, to US$125.3 billion in 2018, a 3.6 fold increase. In 2018, China's services trade deficit with the US reached US$48.5 billion.
Over the past forty years, two way investment between China and the US has grown from near zero to approximately US$160 billion, and this cooperation has proved fruitful. According to MOFCOM, by the end of 2018 accumulative Chinese business direct investment in the US exceeded US$73.17 billion. The rapid growth of Chinese business investment in the US has contributed to local economic growth, job creation, and tax revenues. According to MOFCOM, the paid in investment by the US in China was US$85.19 billion by the end of 2018. In 2017, the total annual sales revenues of US invested companies in China were US$700 billion, with profits exceeding US$50 billion.
Therefore, if trade in goods and services as well as two way investment are taken into account, China US trade and economic relations are mutually beneficial, rather than the US "being taken advantage of."