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Sunday, September 25, 2011

Shakedown Complaint Misses the Point but Highlights a Need

Shakedown Complaint Misses the Point but Highlights a Need

But Senators Levin and Stabenow have a legitimate concern. For while it may be OK for U.S. companies to sell their technology and know-how to China, the terms of those sales will be negotiated and determined by the relative negotiating leverage of the parties to the transaction. Here U.S. companies, which negotiate deals independently with Chinese counterparts that are often government-owned or government-directed, are at a serious disadvantage. The leverage held by the Chinese party (i.e., access to a market comprising one quarter of the earth’s population) is huge. General Motors is a large and sophisticated company that can probably take care of itself. But for the vast majority of U.S. companies facing requests for technology transfer, it is a one-sided negotiation. This should rightfully concern Senator Levin and Senator Stabenow, as the “green” technology and know-how being traded away on unfavorable terms may well have been developed with U.S. taxpayer dollars.

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