What the US wants from China during the 90-day trade war truce

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Finbarr Bermingham

With the US and China facing a 90-day deadline to resolve their differences over trade, we look at some of the areas where Washington will be looking for concessions and its chances of getting what it wants.

Forced technology transfer

China has officially denied that it forces foreign companies to hand over technology as a condition of doing business in the country – a long-standing complaint from the US and other countries.

In October Commerce Minister Zhong Shan said: “I want to emphasise that China’s laws and regulations do not contain any requirement for technology transfer and that companies’ purchases of technologies and patents are pure market behaviour.”

This makes it unlikely that China will openly commit to reforms in this area, which means any movement on this is likely to happen behind the scenes.

IP protection

As far back as 2012, General Keith Alexander, who at the time was leading the American cyber warfare effort, described the theft of US IP by Chinese companies as “greatest transfer of wealth in history”.

IP reform has been in the pipeline for years and some form of upgrade is expected in 2019.

Whether this is enough to satisfy US negotiators remains to be seen, but it would surely be claimed as a victory by Donald Trump regardless.

Cyber intrusions and cyber theft

In 2015, Xi Jinping and Barack Obama agreed to downscale cyberattacks.

However, Chinese attacks on US companies ratcheted up again when the US first implemented trade tariffs in July 2018.

These attacks were directly linked to the People’s Liberation Army, according to the news wire McClatchy.

The implication that these were state- orchestrated means there may be scope for the US to force China’s hand on this, in what would also be claimed as a win for Trump.

Services and agriculture

News that China had agreed to buy “a very substantial amount of agricultural” products (among others) sent soybean prices soaring following the Buenos Aires summit.

There has not been any official public statement from China on this front, but the markets are expectant.

Similarly, a nebulously termed reference to “services” may mean that the Chinese market could become more open to US service providers, particularly in the financial sector where Washington has been demanding action for years.

Once again, this is a long-term objective unlikely to be resolved within 90 days. However, it is an area in which China may be able to make some concessions.