Chinese authorities will no longer be allowed to require foreign companies to hand over intellectual property in exchange for selling products in the country.

This is according to Ning Jizhe, vice chairman of the Cabinet’s National Development and Reform Commission (NDRC), China’s economic planning agency, who addressed reporters at a news conference ahead of the annual session of the National People’s Congress, China’s parliament.

According to Associated Press, this is part of a foreign investment law due to be debated at the National People’s Congress, and will “clarify the system for advancement and protection of foreign investment.”

Intellectual property in China and the US-China trade war

Intellectual property in China, including product names, patents, product designs, has been at the centre of the ongoing trade dispute between the US and China. The US claims that China has “repeatedly engaged in practices to unfairly obtain America’s intellectual property”, with Washington claiming that this is negatively affecting US industries.

According to Forbes, China’s foreign-ownership restriction laws mean that non-domestic businesses have to form joint ventures with Chinese companies in order to sell their goods in the country. These ventures often expose foreign businesses to IP theft.

Chinese technology giant Huawei has been accused of stealing intellectual property from its US partners and is currently under criminal investigation.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData

In 2018, President Trump imposed extra trade tariffs on around $200bn of Chinese imports and China has in turn placed tariffs on $60bn worth of US goods, sparking a trade war.

Talks between the two nations aimed at resolving the dispute are ongoing, with US Trade Representative Robert Lighthizer and China’s Vice Premier Liu He reportedly close to reaching a resolution and lifting tariffs.

Earlier this week, Chinese Premier Li Keqiang outlined the country’s growth target for the next year of 6.0% to 6.5%, down from a target of 6.5% last year. At the opening of the National People’s Congress, Keqiang assured foreign companies that they would be treated as “equals” and that China would “further align our policies with internationally accepted trade rules”.

Read more: Trump can’t stop China from becoming an “AI superpower”, experts warn