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Business Home > International
China agrees on reforms with US

Paul Eckert (Reuters) / 14 July 2013

The United States won China’s acknowledgement of US concerns about cyber theft of intellectual property and commitments to limit subsidies to Chinese state-owned firms during high-level talks this week, the US Treasury said on Friday.

Beijing also renewed a pledge to move to a market-determined exchange rate for its currency at the US-China Strategic and Economic Dialogue, where one notable outcome was a decision to restart negotiations on a bilateral investment treaty.

US business leaders welcomed the moves, even as some said they were largely aspirations rather than firm commitments, with some items recycled from earlier rounds of talks.

“Chinese officials acknowledged US concerns over the growing problem of the cyber-enabled theft of trade secrets and business confidential information,” the Treasury Department said in a statement. “China pledged to better protect against trade secret misappropriation through strengthened enforcement.”

Washington has made cyber theft of intellectual property a priority with China as economic losses from theft have mounted.

Previous US efforts to get Beijing to address the issue of hacking into American networks to steal intellectual property had been met with denials, and China has tended to conflate cyber espionage with cyber-enabled trade secret theft, a problem compounded by recent revelations on US spying.

Beyond “deliverables” that dovetail with US objectives, however, US officials and business leaders saw a sign of the reform debate in China that Americans have long been hoping for.

“It is important to view this ... as a sign of robust debate about economic reform in China,” said Jeremie Waterman, China director for the US Chamber of Commerce. “It can be read as providing a little bit of insight into where China may want to head.”

US Trade Representative Michael Froman told Reuters the Chinese officials in the talks were “quite focused on how to ensure that they maintain the high levels of growth that they seek to achieve” and their pledges reflected domestic reforms.

Waterman said China’s acknowledgement of Washington’s cyber concerns was no small thing, but he warned there were still long-standing questions over a lack of intellectual property rights enforcement by Beijing.

Using the Internet is just a newer, faster method of stealing secrets. But the main US complaints have been that penalties for those who steal intellectual property are too light, often simply low fines, and the zeal to prosecute is uneven across China.


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