China says U.S. trade probe would violate international rules

Joe McDonald | The Associated Press

Show Caption Hide Caption Why a sale of Fiat Chrysler to a Chinese automaker could happen In today's political environment, a sale of Fiat Chrysler, the Italian-American automaker, to a Chinese company seems far-fetched. But analysts say it could happen. Here's why:

BEIJING — China criticized President Donald Trump's order for a possible U.S. trade investigation of Beijing's technology policies as a violation of global rules and said Tuesday it will "resolutely safeguard" Chinese interests.

Trade groups for technology companies welcomed Trump's order Monday but Chinese officials said Washington was violating the spirit of its trade commitments. They said Beijing will take unspecified action if Chinese companies are hurt.

"The United States should not be the underminer of multilateral rules," a foreign ministry spokeswoman, Hua Chunying, said at a regular briefing.

"If the U.S. side disregards the fact it does not respect multilateral trade rules and takes action to damage the economic and trade relations between the two sides," said Hua, "then the Chinese side will never sit back and will take all appropriate measures to resolutely safeguard the legitimate rights and interests of the Chinese side."

More: Trump orders Chinese trade investigation despite cooperation on North Korea

Beijing requires automakers and other foreign companies in China to work through joint ventures, usually with state-owned partners. They often are required to give technology to partners who might become competitors.

More than 20% of 100 American companies that responded to a survey by the U.S.-China Business Council, an industry group, said they were asked to transfer technology within the past three years as a condition of market access, according to Jake Parker, the group's vice president for China operations.

"We don't believe market access should be contingent on transferring technology," said Parker. "It goes counter to China's WTO commitments."

More: Chinese automaker reportedly bids for Fiat Chrysler

Foreign business groups complain companies are being squeezed out of promising Chinese markets or pressured to hand over technology for electric cars and other emerging industries.

Trump said in April he was setting aside trade disputes while Washington and Beijing worked together to persuade North Korea to give up nuclear weapons development. But American officials have resumed criticizing Chinese policy in recent weeks.

"The White House is right to make clear all options are on the table," said Robert D. Atkinson, president of the Information Technology and Innovation Foundation, an industry group in Washington, in a statement.

Parker noted then-President Barack Obama ordered a similar investigation of Chinese policy on green technology in 2010. That ended in a negotiated settlement.

"It didn't lead to any unilateral sanctions against the Chinese," said Parker. "Nor did it undermine the overall U.S.-China trade relationship."

Chinese Ministry of Commerce (in Chinese).

