I don't know what the name of the policy is, but it's been in place for as long as I can remember.
Companies willingly signed those types of deals mostly for two reasons (a) access to cheap labor supply (b) access to the immense Chinese market for their products.
I don't know what the name of the policy is, but it's been in place for as long as I can remember.
Companies willingly signed those types of deals mostly for two reasons (a) access to cheap labor supply (b) access to the immense Chinese market for their products.
"Unlike many developing countries, China was never satisfied with this "passive recipient" model. Instead, China encouraged and in some cases forced foreign firms to share technology through joint ventures. As long ago as the 1980s, China offered foreign firms a deal that few other countries could—trade your technology for access to our market (11). Whether or not this classifies as "forced" technology transfer (and a recent State Council white paper argued it does not [12]) this practice has contributed to the current backlash among some of China's G20 peers. However, for many global companies, the trade until recently has been worth it, providing foreign brands with remarkable revenue growth from the Chinese market and access to a highly competitive manufacturing base."
The following quote is from a document by the US governement:
"According to data from China’s Investment Promotion Agency, which operates under China’s Ministry of Commerce, over 6,000 new China-based JVs with foreign partners were established in 2015 alone, accounting for around $27.8 billion of FDI flows to China. 35 In several industries, foreign firms must form a JV with a Chinese partner in order to invest or operate in China (see Table 1). 36 Frequently, the Chinese partner in a JV will require that its foreign partner share technology and knowhow, leading to technology transfer to China. 37 Although Chinese regulations on foreign investment have been liberalized in recent years China’s foreign investment policy still mandates that foreign firms partner with a local firmto conduct business in restricted industries, while in some industries (typically those dealing with national security or other critical infrastructure sectors) foreign investment remains strictly off limits. 38 (...) In March 2019, the Chinese government passed a new Foreign Investment Law, which seeks to promote inbound FDI to China and protect “the legitimate rights and interests of foreign investors.” 39 Although the law requires government officials to protect foreign firms’ IP rights and bans technology transfer requirements, the law only provides general assurances that, if enacted, will still take years to implement. According to Jingzhou Tao, a managing partner in Beijing at the law firm Dechert LLP, “It will take many [Chinese] administrations, both central and local, (...) a lot of time to amend or abolish [the] existing regulatory and approval processes”for foreign investors in China. 40"
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