China adds new requirements for U.S. tech partners

Chinese workers assemble electronic components at the Foxconn's Shenzhen factory in southern Guangzhou province.

Stacey Vanek Smith: The Chinese government has released a sweeping economic plan that pushes some industries to grow -- and cuts others back. Small coal mines will be closed. Electric vehicles will get government subsidies. And there's a big push to expand all things tech.

Rob Schmitz has more.


Rob Schmitz: China's planning agency will be pumping money into industries like clean tech and aerospace, which should offer some opportunities for U.S. companies in the China market. But:

Xianfang Ren: There will be a price.

That price, says IHS Global Insight analyst Xianfang Ren, will be for foreigners to hand over technology. So say you're an electric vehicle company that wants to do business in China. Ren says you'll have to show the car's blueprints to your Chinese business partner before you can start manufacturing and selling it here. Ren says Beijing used to lower taxes for foreign companies willing to do business in China -- not the case now.

Ren: They gave up too much tax incentives to foreigners for their entry into China before. And they realized that they have to rig the prices for foreigners to come into China.

The concern is that by handing over your technological secrets to your Chinese partner, they will hand it over to your competitors. If you're willing to do that, though, you can get in on a $1.5 trillion pot of money China's setting aside for these new technologies in the next five years.

In Shanghai, I'm Rob Schmitz for Marketplace.

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.

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