US, China promise better trade ties, but alleged tech theft noted

14 February 2012 22:42  [Source: ICIS news]

WASHINGTON (ICIS)--The US and China on Tuesday promised to pursue a more balanced trade relationship and bilateral investments, but chemical industry officials urged stronger US action against Beijing’s alleged theft of American technology.

President Barack Obama met with Chinese Vice President Xi Jinping on Tuesday, saying that “it is absolutely vital that we have a strong relationship with China”.

Obama only hinted at multiple allegations from US businesses and Congress about Chinese theft of US intellectual property and trade secrets, noting: “We want to work with China to make sure that every body is working by the same rules of the road when it comes to the world economic system”.

In a joint statement issued after Obama and Xi met at the White House, the two nations said they “commit to take comprehensive policy measures to achieve more balanced trade and expanded investment in each other’s economies”.

China also agreed to “avoid persistent exchange rate misalignments and refrain from competitive devaluation of currencies”.  US businesses and a special congressional committee have charged repeatedly that Beijing is keeping the value of its currency, the yuan, artificially low in order to stimulate China’s export trade and discourage imports.

The Beijing government has come under broad and repeated accusations in Congress and the US and global business circles of not playing by the rules of open trade.

The World Trade Organisation (WTO) recently ruled that China has been illegally restricting exports of its raw materials, and the US intelligence community has charged that Beijing has been conducting a broad campaign of industrial espionage against US firms.

China and Chinese nationals also have figured prominently in recent federal cases involving theft of US industrial secrets, including those in the chemicals sector.

“The Obama administration should take advantage of Vice President Xi’s visit to directly press his government to do more to crack down on intellectual property theft,” said Bill Allmond, vice president for government and public relations at the Society of Chemical Manufacturers and Affiliates (SOCMA).

Allmond noted that 70% of the world’s intellectual property assets are held within the US and that “highly innovative industries like ours are maliciously targeted”.

US officials recently charged that high-ranking Beijing government officials directed an industrial espionage campaign to steal crucial technology from DuPont for its production of titanium dioxide (TiO2).

Allmond said that the theft of trade secrets from American chemical manufacturers is not new, and that major US chemical firms are not the only targets.

“Small specialty manufacturers that operate facilities only in the US” also are targeted by foreign governments and businesses seeking technical trade secrets, he said.

He said that the threat of industrial espionage for US specialty and fine chemical manufacturers is particularly dangerous because their loss of technical innovations can be crippling.

Allmond noted that for small specialty chemicals producers in the US, “if their intellectual property is stolen, they have no large-scale commodity business to offset that market loss”.

Xi's visit to the US is seen as particularly important because he is expected to succeed Chinese President Hu Jintao next year.

($1 = €0.76)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
+1 713 525 2653

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index