China to defend its interests if US damages trade ties

Reuters

China will take action to defend its interests if the United States damages trade ties, the Ministry of Commerce said yesterday. The announcement came after US President Donald Trump authorized an inquiry into China’s trade practices.

US Trade Representative Robert Lighthizer will have a year to look into whether to launch a formal investigation of China’s policies on intellectual property, which the White House and US industry groups claim “are harming US businesses and jobs.”

The US should respect objective facts, act prudently, abide by its World Trade Organization pledges, and not destroy principles of multilateralism, a spokesman for China’s Ministry of Commerce said in a statement.

“If the US side ignores the facts, and disrespects multilateral trade principles in taking actions that harm both sides’ trade interests, China will absolutely not sit by and watch, will inevitably adopt all appropriate measures, and resolutely safeguard China’s lawful rights.”

The ministry said the US should treasure the cooperation and favorable state of China-US trade relations, and warned that any US action to damage ties would “harm both sides trade relations and companies.”

China was continuously strengthening its administrative and judicial protections for intellectual property, the ministry added. China repeatedly rebuffed attempts by previous US administrations to take action on its IP practices, and has insisted it rigorously protects intellectual property.

In past few years, China has taken active measures in opening up and improving the business environment for foreign investment.

China has always attached great importance to intellectual property rights protection by improving legislation and enhancing administrative and judicial protection, and the progress and effects have been widely acknowledged, the commerce ministry said.

Chinese courts at different levels concluded some 147,000 IPR cases in 2016, according to a report by the Supreme People’s Court.

Last year, China tried a series of trademark cases lodged by US basketball icon Michael Jordan, demonstrating the country’s stance and determination to reinforce judicial protection for intellectual property rights, the report said.

Michael Jordan sued Qiaodan Sports, a Chinese sportswear and shoemaker, for unauthorized use of his name and identity in 2012.

In December, the SPC ruled in favor of Jordan, saying the company’s use of Chinese characters translated from “Jordan” as a trademark violated Jordan’s right to his name and broke the Trademark Law.

China has attached importance to protecting IPR by formulating laws and regulations, cracking down on violations and raising public awareness of IPR, foreign ministry spokeswoman Hua Chunying said on Monday.

“Given the increasingly interwoven interests between China and the United States, a trade war will lead nowhere and neither side will win,” Hua said.

China stands ready to continue to work with the US side and ensure the sound development of bilateral trade ties on the basis of mutual trust, equality and mutual benefit, she said.

In the short term, Moody’s does not expect any implications for China’s sovereign credit profile due to investigations by the US into whether China’s IPR practices undermine US trade, it said in a research note yesterday. “We will review the implications of specific actions by the United States, if any are taken, and of potential responses by China,” it said.

Moody’s assumes any action would be consistent with earlier WTO agreements, implying the broad architecture of US-China trade relations would remain.

China’s GDP growth is largely dependent on domestic demand. As such, US measures targeted at specific sectors are unlikely to have a material economy-wide impact, the note states.