Chinese Economy to be Hit by the Adverse Effects of Trade Secrets Theft
US-China relations have found a new battlefield in the form of technology. With trade secrets no longer safe due to economic espionage by China, the relations of US-China trade and investments of a decade to come, depends on two events occurred hours apart in November.
In the early 2010, an extra-ordinary wave of high withdrawal investments into the companies in the United States and Europe were followed by unethical attempts to have unsanctioned access to trade secrets in many processing sectors.
Barack Obama, in September 2015, as a means to end this embezzlement received a promise from Chinese President Xi that China would not be performing cyber enabled Intellectual Property (IP) theft for industrial and trade advantage.
With commitment not being held since November 1, 2018 a large number of trade secret thefts are being registered against the government and private sectors of China. On the same day, the Attorney General of US, Jeff Sessions, declared the creation of China Initiative, within Department of Justice. The China Initiative was started to fight off and ensure minimum trade secret thefts by China.
Just hours before the Attorney General announced the China Initiative, Donald Trump had already made a call to Xi Jinping, starting the negotiations phase when the trade tensions had risen in March last year.
China wants to continue a high-technology trade and investment relationship with the US. The effectiveness of China’s local change structure is based primarily on US-owned technologies.
Even though both the sides continue to treat these law enforcement and negotiations as two different tracks, they both are interlinked. The continuous accusations and restrictions imposed against Chinese technology companies could cancel technology sharing privileges under the China Initiative.
The Department of Justice can easily cancel out the privileges even if allowed by the president Trump.
In November 2018, the US Justice Department charged Fujian Jinhua, a Chinese government memory chip manufacturer with trade-secrets theft. The Commerce Department at the same time imposed the restrictions on selling software components to the company.
With no access to crucial imports, the company stands today on the brink of bankruptcy. However, an arrangement from both the sides may rehabilitate Fujian Jinhua.
The company is also an example to be learned from how can the trade secret thefts or mere suspicions of that can make the business suffer.
It can be said without any doubt that if China ends trade secret attacks there is a high chance that the US administrations will narrow down its national security perimeter. There can be high-technology trade and investment relationship between both the nations. Any crack in the US-China trade relation would certainly be a price that would affect the Chinese economy.
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