China gives on key US trade-war demand

China has passed a new law that it says will protect the intellectual property rights of foreign businesses operating in the country.

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"Beijing will not discriminate between domestic and foreign enterprises when enforcing its IP laws,” said Ning Jizhe, the vice chairman of China’s National Development and Reform Commission, at a press conference in Beijing.

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Theft of intellectual property from U.S. companies is a driving concern in President Trump's trade war with the world's second-largest economy, with American negotiators seeking to halt forced sharing of trade secrets as a condition of doing business in the country. The U.S. has imposed tariffs on billions of dollars in Chinese imports, driving up costs for businesses, and the two countries recently established a framework for a "phase one" deal.

Under the new regulations, which take effect on Jan. 1, China will "ensure better protection for trade secrets and never allow forced technology transfer," Ning said. "Further, China will strengthen and speed up improvements made to standards for patents, trademarks, copyright infringement, counterfeiting judgments, inspection and identification."

The law minimizes the direct allocation of government resources to the market and direct government intervention in market activities, and establishes a punitive damages system for intellectual property infringement. China will also deepen trademark registration and patent application reform, among other things.

Ning called on the U.S. to do its part. "The other side should also improve the business environment and provide convenience for Chinese-funded enterprises," he said.

"China’s intellectual property theft is real, damaging, and ending thanks to President Trump’s strong trade actions and his OSTP Director’s focus on ending abuses in our open society’s education and research system," an administration official told FOX Business.

The tentative U.S.-China deal, which has not yet been signed, is said to include China making concessions on intellectual property, financial services and agriculture. In return, the U.S. agreed not to implement new tariffs on Chinese goods on Oct. 15. It is not yet clear if the U.S. will go through with its next round of tariffs scheduled for Dec. 15.

The two sides are working to complete a written draft for Presidents Trump and Xi Jinping to sign when they are in Chile next month for the Asia-Pacific Economic Cooperation summit.

Trump has said a comprehensive trade deal will have two or three phases.

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FOX Business' R.N. White contributed to this report.