Chinese government has announced its intention to change the policies of intellectual property protection. This, notably, can change the flow of the trading relationships with the USA completely.
Beijing stated this Sunday that from now on, the country will have strict IP protections and those who will infringe them, will be punished. That, indeed, is a big step towards appeasing the United States.
President of the US, Donald Trump, has been talking about those concerns for ages now, telling how the policies of the Chinese government result in the United States losing billions of dollars and thousands of job places. And protectins IPs has been one of the most prominent demands of the U.S. government during trade war negotiations.
However, Chinese authorities have been denying the fact that the foreign companies are treated unfairly and stating that the tech secrets revealed earlier were part of the agreement with those companies.
Stephen Innes, Chief Asia market strategist, said:
“China is definitely offering up some pretty attractive olive branches.”
Even though both the United States and China have been expressing their desire to end the trade war and reach a consensus, nothing has been set in stone so far. The main issue is that China demands the U.S. to roll back the imposed tariffs, and Trump is still reluctant to do so.
On the other hand, the US wants China to make relevant changes in the whole structure of the country, more specifically, change IP laws and diminish the role of the government in the country’s economy. But many were very skeptical that the Chinese government will ever do so, as those factors are lying in the very basis of the country’s policies.
However, even back in December 2018, Beijing stated that it is ready to make some changes in order to provide a safe environment for the foreign companies that want to operate in China. Thus, the government offered to implement new policies and measures that would be focused on preserving foreign IP.
But according to the words of Michael Hewson, Chief Market analyst for CMC Markets in the United Kingdom, it is unlikely that those modernisations will make it into a “phase one” of an agreement between the two countries. Nevertheless, he admitted that those news are opening new prospects and opportunities for further development of relationships between the US and China.
Meanwhile, China’s officials proclaimed that they are ready to reach a deal. As the trade war has already damaged China’s economy and doesn’t seem like it will develop in different direction any time soon. On the opposite, it is likely that the country will take another hit soon as the US tariffs on another $156 billion worth of Chinese goods were scheduled on December 15, 2019.
Back in October, Donald Trump said that two parties had reached a “substantial phase one” of an agreement and it will take about 5 weeks to finalize the details. The deadline is already over and yet it is still not clear what will come next.