Industry group representing Apple & others says Chinese rules facilitate IP theft

An industry group representing Apple, Google, IBM, Amazon and other U.S. companies has said that Chinese rules on doing business in the country open them up to the risk of intellectual property theft.

Erin Ennis, senior vice-president of the US-China Business Council, has told a government hearing that the rules are unreasonable …

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Business Insider reports that the remarks were made in the first hearing of an inquiry into alleged Chinese intellectual property theft .

Ennis […] told the hearing in Washington that rules that required them to transfer technology to Chinese enterprises “as a condition to gain market access” might place “unreasonable and discriminatory burdens” on American commercial interests.

The event was the first hearing in support of US Trade Representative Robert Lighthizer’s inquiry into alleged Chinese intellectual property theft under Section 301 of the US Trade Act of 1974.

U.S. companies selling products in China are required to disclose details of their technologies, which are then said to be used by local companies to create competing products.

U.S. President Donald Trump ordered the inquiry to be set up in August, and is expected to raise the issue during a visit with Chinese president Xi Jinping likely to take place next month. The full inquiry is, though, expected to take up to a year.

China is a key market for Apple, where it has been struggling to maintain market share in the face of competition from local cheaper brands. Apple’s revenue in Greater China fell 13% in the first half of the year, twice the drop it experienced in the previous year. Market share has dropped from a peak of 13% to less than 10%. Analysts say Apple faces an uphill battle with the iPhone 8 and X in China.

Photo of Beijing: Arup


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