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June 29, 2018

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China releases WTO white paper, says IPR stealing charges baseless

CHINA has labeled accusations that it steals intellectual property rights and forces technological transfers as sheer fabrications, with Vice Minister of Commerce Wang Shouwen dismissing them as groundless.

Wang was speaking at a press briefing in Beijing yesterday when the State Council Information Office released a white paper titled “China and the World Trade Organization” for the first time.

“China is firm on IPR protection and has taken notable measures which have produced recognized results,” Wang said.

Citing surveys by the American Chamber of Commerce in China and the European Union Chamber of Commerce in China, Wang said IPR protection is far from the most prominent issue for the member enterprises.

According to the AmCham China’s business climate survey, member enterprises saw IPR as the 12th issue of concern for their Chinese operations, while a similar survey by European Chamber listed IPR the 11th.

“If China had forced technological transfers, failed in IPR protection, or even stolen IPRs, the enterprises would have complained directly,” the vice minister said.

“The reason enterprises have not complained or listed IPR as their primary concern is because China has done a good job in handling IPR-related issues,” Wang said.

In terms of IPR legislation, China has enacted laws and regulations which are compliant with the WTO rules and increased law enforcement on this front, he said.

China has set up three IPR courts in Beijing, Shanghai and Guangzhou, and special judicial organs in 15 cities to handle cross-regional IPR cases.

Moreover, the State Intellectual Property Office has been restructured to strengthen law enforcement.

As a result, foreign IPR holders have won 80 percent of the infringement lawsuits they filed in China, Wang said.

“China has never stopped promoting IPR protection,” Wang said, adding that foreign enterprises have spoken highly of the measures.

Since 2001, intellectual property royalties paid by China to foreign rights holders have registered an annual growth of 17 percent, reaching US$28.6 billion in 2017, according to the white paper.

Last year, China’s invention patent applications ranked the first in the world for the seventh consecutive year, another example of China’s sound protection of IPRs, Wang said.

“IPR protection in China is not perfect, but this fact does not lend legitimacy to any accusations that China’s defects in IPR protection are the root cause of trade frictions,” the vice minister said.

“China will continue to work hard in strengthening IPR protection for the interests of not only Chinese but also foreign enterprises,” Wang said.

“The allegation that China benefited (from the WTO accession) while others suffered is far from the truth,” Wang said. No WTO member has suffered economically due to China’s accession, he said.

Both developed and developing members of the WTO have benefited from China’s entry, Wang said.

He gave the example of growing US exports to China, which surged from US$26 billion in 2001 to nearly US$150 billion last year as China became the third biggest-market for US exports, up from the 11th in 2001.

Between 2008 and 2017, exports of US goods to China rose 86 percent, while those to other markets climbed only 21 percent, according to Wang.

In services, US exports to China quadrupled from 2007 to 2016, compared with a 50 percent increase in US exports to other markets.

Growth of US businesses

Wang said US businesses in China saw their sales in China grow to US$600 billion in 2016 from 36 million yuan in 2001, about US$4.4 million calculated by the exchange rate that year.

In 2001, China paid US$1.9 billion in royalties to other countries for use of intellectual property. In 2017, the royalties it paid to the United States alone stood at US$7.1 billion, Wang said.

China’s accession to the WTO also brought benefits to developing countries. Wang said the country has given zero tariff treatment on 97 percent of tariff lines to the least developed nations that have diplomatic relations with China.

“China has become the biggest export market for the least developed countries, accounting for 20 percent of their total exports,” Wang said.

The wider opening of China’s huge market has made great contributions to the world economy, he said.

Between 2001 and 2017, China’s imports of goods recorded an annual average growth of 13.5 percent, double the world growth rate, while its imports of services posted an average growth of 16.7 percent, 2.7 times the world average level, Wang cited data from international organizations as saying.

The Chinese government has published the white paper to give a full account of China’s fulfillment of its WTO commitments, to explain China’s principles, stances, policies and propositions regarding the multilateral trading system, and to describe China’s vision and actions in advancing higher-level reform and opening-up, according to the white paper.

“China has comprehensively fulfilled its commitments to the WTO, substantially opened its market to the world, and delivered mutually beneficial and win-win outcomes on a wider scale,” the white paper said.

Wang said: “As of 2010, China had already delivered on all of its tariff reduction commitments, lowering the overall tariff level from 15.3 percent in 2001 to 9.8 percent.”

Afterward, China voluntarily slashed its import tariff rates on an interim basis for many times, he said.

“In 2015, China’s trade-weighted average tariff was reduced to 4.4 percent, fairly close to 2.4 percent of the United States and 3 percent of the European Union,” said Wang, who also serves as Deputy China International Trade Representative.

“Through these efforts, China has lived up to its responsibility as a major country,” says the white paper, adding that China firmly supports the multilateral trading system and has made significant contribution to the world after its WTO accession.

“China firmly observes and upholds the WTO rules, and supports the multilateral trading system that is open, transparent, inclusive and non-discriminatory. China has participated in all aspects of WTO work, made its voice heard and contributed its own proposals on improving global economic governance. China is an active participant, strong supporter and major contributor in the multilateral trading system,” it says.

China acceded to the WTO in 2001. This was a milestone in China’s integration into economic globalization, marking a new historic stage of reform and opening-up.

“Accession to the WTO has boosted China’s development and benefited the rest of the world,” says the white paper. “China has become a major stabilizer and driving force for the world economy.”

It says China stays committed to the strategy of opening-up for win-win results, vigorously promotes the Belt and Road Initiative, and shares opportunities and benefits with other countries and their people while developing China itself, enhancing global wellbeing and common prosperity.

“China will continue to uphold the principle of achieving shared benefits through consultation and collaboration in advancing the Belt and Road Initiative, so as to provide others with opportunities to take a ride on the express train of China’s development,” said Wang.

Over the past 40 years, China has been adhering to the fundamental national policy of reform and opening-up and pursuing development with its door wide open. A model of all-round, multi-level, and wide-ranging opening-up has gradually taken shape. At the historic starting point of a new era, China’s door of opening-up will not be closed and will only open even wider, says the white paper.

“Opening-up was key to China’s economic growth over the past 40 years.

“In the same vein, high-quality development of China’s economy in the future can only be achieved with greater openness. China will continue adhering to the fundamental national policy of reform and opening-up,” it says.

Multilateral trade

China hopes that members of the WTO will firmly support the multilateral trade system and jointly address challenges to the system.

“The most important WTO mechanism is the trade dispute settlement mechanism, whose Appellate Body is facing a serious shortage of members,” Wang said.

There should be seven Appellate Body members, but now three are vacant and they cannot be filled as one WTO member is standing in the way, which might lead to the body’s stagnation.

Another challenge facing the WTO is that one of its members is using the Section 301, a section assumed illegal by the WTO, to impose restrictions on its trade partners.

One WTO member is also abusing “national security exception” articles on steel and aluminium products and even plans to use them on automobile products in the future, which will make WTO rules hard to implement if other members follow suit.


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