US won't talk to China on trade until it gets specific plan to halt tech theft

• The U.S. demands a specific plan from China to halt technology theft.
• The impasse threatens a meeting in late-November between President Donald Trump and China's Xi Jinping

By Jeff Cox 

Trade tensions between have taken another negative turn, with the U.S. demanding that China come up with a specific plan to stop stealing technology.
Until Beijing does so, the U.S. will not resume trade negotiations, according to a report Thursday in the Wall Street Journal.
The latest impasse jeopardizes a meeting between President Donald Trump and China's Xi Jinping scheduled for the end of November at the G20 meeting.
There had been some hope that Trump and the Chinese president could make progress on the myriad trade issues between the two sides, a major focus being forced technology transfers.
China has sought to resume talks but the U.S. has refused until Beijing addresses the tech issue.
"If China wants [the G-20 session] to be a meaningful meeting, we need to do the groundwork," a senior White House official told the Journal.
"And if they don't give us any information, it's just hard to see how that becomes fruitful."
The U.S. has slapped tariffs on $200 billion worth of Chinese goods, charging the country with unfair trade practices that have ballooned the deficit between the two.
President Trump has threatened to put duties on all imported goods from China.
A week ago, Larry Kudlow, the National Economic Council director, said the U.S. has let its demands be known but has not seen a satisfactory response.
"They are unfair traders. They are illegal traders. They have stolen our intellectual property," Kudlow said in Detroit.
"China has not responded positively to any of our asks."
The Journal reports that there are risks for China to tip its hand on its negotiation strategy.
In 1999, the Clinton administration made public an offer from China when it entered the World Trade Organization, sparking a crisis at home that nearly killed China's entrance into the group.

EU Is Ready to Fight Back Against China's Growing Trade Dominance

• Bloomberg survey of EU28 shows investment screening is coming
• Even those with reservations favor a debate on China strategy

By Lyubov Pronina, John Follain, and Slav Okov

Europe is set to tighten controls over foreign investment, a sign of growing wariness of China’s efforts to use its $11 trillion economy to become a dominant global power.
A Bloomberg survey of the European Union’s 28 member states found that at least 15 governments actively or tacitly support draft legislation that would screen investments from outside the bloc. 

With a majority prepared to wave it through, the proposal is on course for passage by the European Parliament, the bill’s next step to becoming law.
The results show that Europe is waking up to the risks and not just the benefits of inward investment, predominantly from China. 

A Bloomberg audit found that China has invested at least $318 billion in Europe over the past decade, from critical infrastructure to high-tech companies -- more than in the U.S. over the same period.

Nine member states are fully behind the proposals and at least another six won’t oppose them, according to the survey
Europe’s pushback reflects a dilemma shared by governments worldwide as they grapple with China’s growing global clout. 

U.S. Treasury Secretary Steven Mnuchin is leading a delegation to Beijing this week amid disputes over trade, reciprocal market access and China’s state-driven economic model.
As the U.S., Japan and Australia adopt rigorous screening programs, Europe risks becoming “the shop of last resort” for those seeking advanced technologies, the European Council on Foreign Relations warned in a December report.

Taking Know-How
Italy is among those pushing for tighter screening “because we believe that trade must be fair and investment must be productive,” Sandro Gozi, Italy’s junior minister for European affairs, said in an interview. 

“We have to assess whether investment by non-EU countries aims to do business, to promote growth, to create jobs in Europe, or whether it’s just aimed to acquire and then take the know-how of our businesses away from Europe.”
The EU proposal would create a centralized database of past foreign investments in Europe and an alert mechanism for future ones, leaving the ultimate power of approving deals with individual governments. 

The EU Parliament’s international-trade committee, however, intends to vote on amendments that could give the bill more teeth. 

After that, the spotlight will shift to the deliberations among EU governments.
For Bulgaria, which holds the EU’s rotating presidency, the proposal “is one of our trade policy priorities,” the Economy Ministry said in an emailed response to questions. 

The draft regulation doesn’t envisage obligatory screening, but rather “its purpose is to establish a mechanism for cooperation and coordination among member states” whereby countries applying screening should inform the others, it said.
Last year, when the EU first floated an investment screening mechanism, China called on the bloc to observe World Trade Organization rules and avoid discriminatory investment policies. 

It also says its signature Belt and Road infrastructure program benefits everyone, noting that leaders of most EU countries have expressed interest in signing up.
The survey revealed splits among governments, with countries such as Finland insisting the bloc avoid any resort to protectionist measures and others like Malta saying that small economies must remain open to investment. 

The U.K. and the Czech Republic were among those to stress that any curbs should be imposed at national level without recourse to the EU. 

Yet all those surveyed welcomed the debate.
“There is a sea change of perception” toward China, said Francois Godemont, director of the Asia program at the European Council on Foreign Relations. 

He cited a “wave of investments” for having fueled the shift, along with an inability of the EU and China to resolve their respective market issues to date. 

In addition, he said, an awareness of political change in China including the removal of term limits has “soured the mood.”
All the same, the EU commission proposal “is already pretty much a compromise because it’s not legally binding,” Godemont said.

Europe’s approach is tame compared to President Donald Trump as he pushes his “America First” trade agenda, threatening protectionist barriers against allies and adversaries alike. 

The White House has said it would forge a “trade coalition of the willing” to stand up to China for unfair trade practices. 

It’s also railed against China’s program to become the world leader in a slew of industries by 2025.
China’s global ambitions, including a push to dominate artificial intelligence, are causing consternation in Berlin and Paris: Chancellor Angela Merkel and President Emmanuel Macron have both made China’s rise a policy priority. 

Macron has pledged to seek more strategic coordination with Germany on the issue. 

Merkel plans her own visit to China later this year.
Even EU state traditionally more skeptical of a bloc-wide policy approach are paying heed.
Hungary is ready to debate investment screening so long as it doesn’t result in different standards among EU members, Gergely Gulyas, vice president and parliamentary leader of Hungary’s ruling Fidesz party, said in an interview.
“If we have a common China policy, we are ready to be part of it,” he said.

Talkative President

Schumer: Trump 'all talk and no action' on China
By Ted Barrett

Senate Democratic Leader Chuck Schumer held a conference call with reporters Tuesday to blast Donald Trump's handling of trade issues with China -- including what he called China's unfair trade practices, currency manipulation, intellectual property theft and more.
"China has taken us to the cleaner when it comes to the economy. China has stolen millions of jobs and trillions of dollars," Schumer said, noting that he had agreed with much of Trump's rhetoric about getting tough on China during the campaign. 

"By any measure, the Chinese government has pulled the rug out from the United States and administrations from both parties haven't been strong enough to fight back."
But Schumer said since Trump took office he has been "all talk and no action" on China.
"He had a golden opportunity to win concessions from Xi Jinping when he visited last week. But unfortunately, Trump has come home empty handed. The two countries have said they will work on a 100-day plan to bring better balance to the trade relationship. That means virtually nothing," Schumer said.
He was asked about Trump's tweet Tuesday linking possible trade deals to China's handling of the nuclear threat from North Korea.
"The Chinese have done nothing on North Korea and I don't they will unless they think America is tough," Schumer said. 

"The tougher we are on trade, the more likely the Chinese are going to do something on North Korea."
"I think what he (Trump) is saying is if they are tough on North Korea, I'll go easier on trade. First, ask the American people if they like that deal, and they won't," said Schumer who indicated he told the President that before Trump met with Xi. 

"I told him the tougher you are on one, the more likely you'll get on the other. I won't tell you what he said, but not much."
On Syria, Schumer said the strike to retaliate for Syria's use of chemical weapons was appropriate but that if Trump wants to do more he needs to devise a strategy and present it to Congress. 

He said Democrats are very concerned about getting into a land war in Syria.
"Any further action he should come to Congress. There should be a defined strategy. I, for one, am really, really wary and worried about getting committed to another land war and making the same mistakes we did in Iraq," Schumer said explaining that his caucus would be "very dubious" of that happening.