China’s premier denies Beijing tells companies to spy

“This is not how China behaves. We did not do that and will not do that in the future,” the premier said when asked whether Beijing told Chinese companies to spy on foreign countries.

The United States, Australia and some other governments have imposed curbs on use of technology from Chinese vendors including Huawei Technologies Ltd. Washington is lobbying European and other allies to shun Huawei as their phone carriers prepare to invest billions of dollars in next-generation technology.

Huawei, the biggest global maker of network gear, has denied accusations it facilitates Chinese spying. Its founder has told reporters he would reject official requests to disclose customer secrets.

President Xi Jinping’s government faces mounting pressure to repair trade relations with the United States and other major markets after economic growth fell to a three-decade low of 6.6 per cent last year. Activity has weakened further on multiple fronts including cooling export growth and a contraction in auto sales.

Li promised to create a “level playing field” for all competitors in China’s state-dominated economy to “boost the vitality of the market.” He pledged to open more industries to foreign investment but gave no details.

“We will adhere to the principle of neutrality and treat domestic and foreign companies as equals,” the premier said.

Also Friday, the largely ceremonial legislature endorsed a law discouraging Chinese officials from pressuring companies to hand over technology.

The measure is part of an investment law that aims to address complaints China’s system is rigged against foreign companies.

“This is designed to protect the rights and interests of foreign investors and attract more foreign investment,” Li said.

Washington also wants China to roll back plans for government-led creation of global competitors in robotics and other technologies, and it was unclear if the measure would mollify Trump. He raised duties on Chinese imports in July in response to complaints Beijing steals or pressures companies to give up technology. Beijing followed suit.

Both governments say negotiations over those issues are making progress but they have yet to announce formal agreements on ending the dispute that has disrupted trade in soybeans, medical equipment and billions of dollars’ worth of other goods.

The official Xinhua News Agency said China’s economy czar, Vice Premier Liu He, spoke by phone with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. The one-sentence report said they made “further substantial progress” but gave no details.

Forecasters expect Chinese economic activity to pick up in the quarter that starts in April as increased government spending on public works construction gains traction.

“The economy has started to rely on fiscal stimulus, especially for infrastructure investment,” Irene Pang of ING said in a report Thursday. “This will continue for the rest of 2019, and will be particularly important if a trade deal comes later than expected.”

Government plans also call for higher spending on development of technologies including artificial intelligence, electric cars, biotechnology and new materials that China’s leaders see as a path to prosperity and global influence.

China’s emergence as a competitor in smartphones, solar power and other technologies has increased consumer choice and helped to drive down prices. Washington and other governments worry that Chinese competition threatens their industries and employment.

The government says the investment law will prohibit Chinese officials from using “administrative methods to force technology transfers.”

Foreign business groups welcomed that but said they need to see how the law will be enforced.

The European Union Chamber of Commerce in China expressed concern Friday the law allows regulators to retaliate against companies from a country they believe discriminates against a Chinese enterprise.

That “allows for political issues to influence” regulatory decisions, it said in a statement. The law’s “vague wording” adds to legal uncertainty for companies, it said.

The American Chamber of Commerce in China expressed concern in a statement Wednesday about the broad scope of “national security reviews” allowed by the law that might block business activity.

The European chamber expressed concern that the focus on “administrative methods” might lead officials to use other pressure tactics.

Chinese officials deny that companies are required to hand over technology. But they face pressures including requirements in industries including auto manufacturing and pharmaceuticals to work through state-owned partners. That requires to them provide technology to companies the ruling Communist Party hopes will become their competitors.

Joe McDonald, The Associated Press

by Canadian Press

China’s premier denies Beijing tells companies to spy

What's Trending