China to Raise Penalties on Violations of IPRs in the US-China Trade War Compromise

China has recently said in a statement that it will raise the penalties on Intellectual Property (IP) theft and the violations of Intellectual Property Rights (IPRs) in an attempt to address one of the prime issues and sticking points in trade talks with the United States. According to the guidelines issued by the government on 24th November 2019, the country shall also be looking forward to lowering the thresholds for criminal punishments for the infringers and violators who steal IP. However, the country didn’t say much about what such moves might entail.

The United States wants China to stay firm about enforcing rules on IP theft and stop forcing the US companies for handing over or disclosing their commercial secrets as a condition of doing business in their country. China stated that it has the aim of reducing the frequent cases of IP violations and theft by the year 2022, and shall work towards making it easier for the victims of transgressions to receive the compensations.

Both China and the United States are working towards a partial trade deal by leaving the more controversial and complicated issues for the later discussions. The chief trade negotiator of China spoke about his plans last week corresponding to reforming the state enterprises, enforcing the IP Rights, opening up the financial sector, and various other issues, which are at the center of the demands of the US for change in the economic system of China.

According to the guidelines issued by the government of China, strengthening the protection of the IP Rights is crucial for improving and enhancing the IPR protection system in China and shall also be the biggest incentive for boosting the country’s economic competitiveness. Also, the local governments shall play a significant role in strengthening the IPR Protection.

In May 2019, the United States added Huawei Technologies Co., a Chinese multinational technology company, to the entity list (the United States Bureau of Industry and Security Entity List) intending to block the US companies from selling or merchandising components to the largest technology company of China. Huawei Technologies is accused of being a threat to the national security of the United States; however, the company has denied such claims.

Xi Jinping, the President of China, said that his country wishes to work towards a phase-one trade agreement with the United States, which is, in part, based on equality. However, President Donald Trump said it doesn’t sound like a deal to him, as China has already reached the ceiling in this case, and the United States has just started.

Negotiators from both China and the US are on regular talking terms for bridging the remaining differences and resolving the issues concerning the protection of IP and opening the economy of China further to the foreign countries. As an initial step of the agreement, both the countries have agreed on what tariffs each side would rollback.