The European Union has launched a second challenge against China at the World Trade Organization over laws it says force the transfer of technology in areas including electric vehicles and biotechnology.
The European Commission, which oversees trade policy in the 28-member European Union, said in a statement that it was significantly broadening and deepening the scope of its WTO action against China.
The EU’s new challenge focuses on Chinese laws that regulate the approval of investments for electric vehicles and biotechnology and the approval of joint ventures across sectors.
The Commission said that the Chinese laws imposed requirements on foreign companies operating in China, contravening a commitment not to do so made when Beijing joined the WTO.
“The so-called performance requirements force or induce European companies to transfer technology to their joint ventures with Chinese partners in exchange for the necessary administrative approvals by the Chinese authorities,” the Commission said.
“Foreign companies are also required to carry out research and development activities in China,” it continued.
Beijing has said such transfers are voluntary not forced and that many foreign companies have benefited from the work on new technologies by R&D centers in China
In June, the European Union launched a separate WTO case against technology transfers by China. This targeted specific provisions under Chinese regulations on import and exports of technology centered on Chinese-foreign equity joint ventures.
The EU says this goes against WTO rules to treat equally national and foreign companies and unduly restricts the rights of EU companies, such as in relation to patents.
The WTO challenge will first result in consultations between the parties. If no solution is found in 60 days, the EU can then request that the WTO set up a panel to adjudicate on the issue.
