• Rouse Consultancy

TARIFFS IMPACT GLOBAL INNOVATION

Updated: Aug 7, 2019

Holly White, a Senior Consultant at Rouse Consultancy gives her perspectives to World Intellectual Property Review on the impact of trade dispute tariffs on creating barriers for innovation and technology development.


#innovation #China #tech



President Xi Jinping yesterday claimed that China protects the interests of foreign

companies and investors by punishing IP infringements and that “openness” is a trademark of the country’s trade practices.


Xi made his remarks in a keynote speech delivered at the opening ceremony of the first

China International Import Expo (CIIE) in Shanghai.


The CIIE—which is taking place between November 5 and November 10—is being hosted by China’s Ministry of Commerce (MoC), in partnership with the World Trade Organization, the UN Conference on Trade and Development, and the UN Industrial Development Organization.


During yesterday’s opening ceremony, Xi made reference to China’s “consistent position of supporting the multilateral trading system and promoting free trade” and stressed the

importance of openness to foster economic cooperation.


“Openness has become a trademark of China,” he said.

Xi also made comments that appear to reference the ongoing trade dispute between China and the US, which dates to at least August 2017 when the Office of the US Trade

Representative launched an investigation into China’s tech transfer and IP practices.

Earlier this year, President Donald Trump implemented a 25% tariff on $50 billion of goods from China—which China responded to by introducing its own set of tariffs—before announcing that further tariffs could be applied to more than $500 billion worth of Chinese goods.


Yesterday, Xi said: “Countries need to improve their business environment by addressing their problems. They should not just point fingers at others to gloss over their own problems.”


The president added that reducing tariff barriers will lead to inter-connectivity in global

trade, “while the practices of beggaring thy neighbour, isolation and seclusion will only

result in trade stagnation and an unhealthy world economy”.


Holly White, Senior Consultant at Rouse, London, who specialises in relations with China,

predicted that despite Xi’s comments, “tariff escalation could unfortunately continue for the foreseeable future”.


She suggested that the current “tit-for-tat” tariff measures may establish a barrier to

innovation between the West and China, and hurt the exchange of innovation and

technology between the regions.


In his speech yesterday, Xi said: “We protect the lawful rights and interests of foreign

companies, and are resolute in meting out, in a law-binding manner, punishment for

violations of the lawful rights and interests of foreign investors, particularly IP rights

infringements.”


The president added that China will “enhance” the credibility and efficiency of its IP

examination, and implement a punitive compensation system to “significantly raise the

cost” of violations for offenders.

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