China’s National Peoples Congress is set to vote in March on legislation which will ban forced technology transfers and “illegal” government interference in the actions of foreign companies. The legislation will likely be viewed positively by US officials who have slammed intellectual property theft by Beijing.
The National Peoples Congress convenes March 5th and it is expected that to make the process as fast as possible the Chinese government will fast track the legislation. The Standing Committee of the NPC convened a special two-day session to review the draft of the deal There is an “urgent need” for this current legislation “could hardly catch up with the changing requirements in building a new system of open economy”, Justice Minister Fu Zhenghua according to state-run Xinhua News Agency. The National Peoples Congress is very unlikely to reject the legislation as delegates are chosen on the Communist Party of China loyalty.
There is skepticism over how far this legislation will go, as rule of law issues and WTO rule violations have been by China have been common. Full details of the legislation will be made public in February and the legislation will likely be discussed when Chinese and US officials meet in Washington later Wednesday.
China has offered to buy over 1 trillion in US products a move which would dramatically cut the US Trade Deficit with China an issue President Donald Trump campaigned on, according to Treasury Secretary Steve Mnuchin.
“They put on the table an offer of over $1.2 trillion in additional commitments. But the details of that still need to be negotiated. … This isn’t just about buying things. This is about opening markets to US companies and protecting US technology,” Mnuchin said on CNBC. “Those are very important structural issues to President Donald Trump.”
As trade talks begin, the two largest global economies have a lot at stake. China’s growth rate is the lowest it has been since 1990, and the US consumer market has been very important to China’s economy. China is facing a slump in retail sales and industrial production, according to Chinese media outlet SCMP and the Chinese stock market fell 27% according to a Business Insider report.
