The European Union is considering forcing Chinese companies to transfer technology to European firms if they want to invest and operate in the bloc.
The European Commission is set to present a comprehensive paper on the bloc’s economic security, with discussions on tech transfers a key part of its agenda.
“If we invite Chinese investments to Europe, it must come with the precondition that we also have some kind of technology transfer,” EU trade chief and Danish Foreign Minister Lars Rasmussen told a news conference on Tuesday.
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“I don’t think we have completed that discussion, but we find ourselves in new circumstances,” he added.
Rasmussen said that many in Europe thought that, by playing by the rules, they could emerge as winners. He said the EU should take some inspiration from the US and China in setting conditions.
The EU says China has benefited from large-scale technology transfers from European businesses set up there, such as transfers made as a condition of market access or via rules that mandate joint ventures with Chinese companies.
European Trade Commissioner Maros Sefcovic said the EU welcomed foreign investment, but these needed to be “real investments.”
This meant they created new jobs in the bloc and involved transfers of technology and intellectual property rights “as European companies have been doing when they’ve been investing in China.”
Many EU ministers had brought these issues up, Sefcovic said, and it was now up to the Commission to translate this into concrete principles and proposals.
The discussions come at a time when Chinese businesses are increasingly pivoting to Europe to expand their operations. Chinese electric vehicle-makers like BYD, for instance, is setting up multiple factories across the region to tap into local markets and avoid tariffs from importing vehicles.
The EU has also emerged as a key market for Chinese firms due to increasing competition and deflationary pressures at home and tough policies that deter their expansion in the US.
On Wednesday, a Chinese foreign ministry spokesperson, Lin Jian, responded to the EU’s plan saying China opposed forced technology transfer and “protectionist and discriminatory practices in the name of enhancing competitiveness”.
- Reuters, with additional editing and inputs from Vishakha Saxena
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