China's latest weapon to acquire western technology

2023-02-23

The growing conflict between the U.S. and China stretches from a computer chip factory to a suspected spy balloon over the United States. Running through it all is a contest for technological superiority.

China has been trying to develop cutting-edge technology for years, in part by spending heavily on research. China is now also using its domestic legal system to acquire technology from other countries, according to Western officials and business executives.

U.S. and EU officials have accused China of using domestic courts and patent review panels to undermine foreign intellectual property and help Chinese companies. Such practices in China have focused on sectors it deems important, such as technology, pharmaceuticals and rare earth minerals, they said.

A Chinese legal team has invalidated a ten-year-old patent of an American X-ray equipment maker. In a Shanghai court, a Spanish mobile antenna designer lost a patent suit in similar circumstances. Another Chinese court has ruled that a Japanese conglomerate violated antitrust laws by refusing to license its technology to a Chinese competitor.

At the 20th National Congress of the Communist Party in October last year, Xi Jinping praised China's entry into the ranks of innovative countries and said he would promote the construction of a future of common prosperity. Xi Jinping won his third term as general secretary of the Communist Party of China at the meeting. In his report published at the meeting, he said: "It is necessary to increase diversified investment in science and technology, strengthen the legal protection of intellectual property rights, and form a basic system to support comprehensive innovation."

The game over China's access to technology has been going on for years. Counterfeit products and counterfeit logos are common in China. Recently, the Chinese government has tried to crack down on local companies that infringe on the intellectual property rights of some foreign companies. Last July, luxury shoe maker Manolo Blahnik said it had won a long-running trademark dispute with a Chinese businessman accused of improperly selling shoes under a name similar to the brand.

But U.S. and EU officials, as well as executives at some Western companies, say China is taking the opposite route in some industries. The State Administration for Market Regulation, which oversees all intellectual property matters, and the Chinese embassy in the United States did not respond to requests for comment.

The aforementioned conflict is at the heart of an increasingly fierce competition between the United States and China for technological and economic superiority. The United States has imposed restrictions on chip-related exports to China. The Chinese government accuses the United States of politicizing technology issues in an attempt to assert U.S. leadership in those fields.

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