U.S. trade hawks exaggerate China’s threat

Beijing also requires many American companies to create joint ventures with Chinese firms in order to sell to Chinese consumers—joint ventures that, in Pence’s words, require American businesses “to hand over their trade secrets as the cost of doing business in China.” Last summer, a White House report cited these joint ventures as evidence of “how China’s economic aggression threatens the technologies and intellectual property of the United States and the world.”

But here, too, China isn’t doing anything exceptional. According to the U.S. Chamber of Commerce, which last year ranked countries on how well they protect the intellectual property of foreign companies, China scored fairly well among developing nations: just below Mexico and Malaysia but above Turkey, Brazil, South Africa, and the Philippines. A 2017 study of cases in which foreign companies sued for patent infringement in Chinese courts by Renjun Bian of the University of California at Berkeley School of Law found that foreign companies actually prevailed at higher rates than did Chinese litigants.

Other critics focus on the way the Chinese government subsidizes its industries, thus giving them an unfair advantage. There’s a germ of truth here: Beijing pours money into promising companies in ways the United States and most European governments do not. But this isn’t unusual among developing economies either.