Submission + - Dutch Seize Nexperia, EU Floats Forced Tech Transfer on China Investment (aljazeera.com)
hackingbear writes: The Dutch government said on Sunday that it had intervened in Chinese-owned Netherlands-based Nexperia, which makes chips for cars and consumer electronics. It cited worries about possible transfer of technology to its Chinese parent company, Wingtech. In a statement released on Sunday, the Dutch Ministry of Economic Affairs said it had invoked the “highly exceptional” Goods Availability Act to intervene and take control of Nexperia on September 30. The Act allows the Netherlands to intervene in privately owned companies in exceptional circumstances, such as if the government perceives a threat to the country’s economic security or if it is necessary to ensure that critical goods remain available. However, the move came after rising U.S. pressure on the company to remove its Chinese CEO, a court ruling released on Tuesday showed, underscoring how the firm has been caught in the crossfire between Washington and Beijing. On Tuesday, Nexperia announced that it had suspended Zhang, founder of Wingtech, as a director and removed him as chief executive officer (CEO). It has appointed Stegan Tilger, chief financial officer (CFO), as interim CEO. China responded immediately by banning Nexperia from exporting from China.
In a related development, the European Union is considering forcing Chinese companies to transfer technology to European firms if they want to invest and operate in the bloc. “If we invite Chinese investments to Europe, it must come with the precondition that we also have some kind of technology transfer,” EU trade chief and Danish Foreign Minister Lars Rasmussen told a news conference on Tuesday. The EU says China has benefited from large-scale technology transfers from European businesses set up there, such as transfers made as a condition of market access or via rules that mandate joint ventures with Chinese companies. Technology transfer is used by developing countries as part of the bargain in which they have agreed to protect intellectual property rights. The World Trade Organization's TRIPS Agreement aims to achieve the transfer and dissemination of technology as part of its objectives, and specifically requires developed country members to provide incentives for their companies to promote the transfer of technology to least-developed countries. There is no legal obligation for tech transfer in Chinese law but some argued that percentage cap on foreign ownership amounts to forced tech transfer, at least in spirit if no in letters; however, it is worth noting that, under WTO, foreign ownership cap is itself allowed even for China and each country commits to a schedule to remove the cap restrictions. Lastly, whether China is still a developing country, a self-declare status under WTO, is a subject of another heated debate — China is already the second largest economy with advanced technology capability, yet its per capita GDP still qualifies it as a middle-income developing country. Taken together these two contradictory developments, the western world is worrying about technologies being transferred to China on one hand while trying to snatch Chinese technologies on the other.
In a related development, the European Union is considering forcing Chinese companies to transfer technology to European firms if they want to invest and operate in the bloc. “If we invite Chinese investments to Europe, it must come with the precondition that we also have some kind of technology transfer,” EU trade chief and Danish Foreign Minister Lars Rasmussen told a news conference on Tuesday. The EU says China has benefited from large-scale technology transfers from European businesses set up there, such as transfers made as a condition of market access or via rules that mandate joint ventures with Chinese companies. Technology transfer is used by developing countries as part of the bargain in which they have agreed to protect intellectual property rights. The World Trade Organization's TRIPS Agreement aims to achieve the transfer and dissemination of technology as part of its objectives, and specifically requires developed country members to provide incentives for their companies to promote the transfer of technology to least-developed countries. There is no legal obligation for tech transfer in Chinese law but some argued that percentage cap on foreign ownership amounts to forced tech transfer, at least in spirit if no in letters; however, it is worth noting that, under WTO, foreign ownership cap is itself allowed even for China and each country commits to a schedule to remove the cap restrictions. Lastly, whether China is still a developing country, a self-declare status under WTO, is a subject of another heated debate — China is already the second largest economy with advanced technology capability, yet its per capita GDP still qualifies it as a middle-income developing country. Taken together these two contradictory developments, the western world is worrying about technologies being transferred to China on one hand while trying to snatch Chinese technologies on the other.
