Senator Webb Re-Introduces Legislation to Stop "Giving Away" Taxpayer-Funded Technologies to China

Statement

Senator Jim Webb (D-VA) re-introduced legislation yesterday to stop technologies that are developed with the support of U.S. taxpayers from being given away to China or other countries. American companies operating in China are often required to transfer their intellectual property and proprietary technology to China as a prerequisite for doing business there. Many of these technologies were developed using U.S. tax dollars through grants, loans, loan guarantees and other federal incentives.

"If taxpayers supported the development of the technology, they own a piece of it and it can't just be given away," said Senator Webb. "Federal dollars that go toward R&D funding, loan guarantees, and public-private partnerships in order to help develop the next generation of technologies here are supposed to be making American businesses competitive and generate American jobs -- not to help develop other industries, such as those in China."

"In cases where technologies are developed with the support of the American taxpayer, my legislation prohibits companies from transferring the technology to countries that by law, practice, or policy require proprietary technology transfers as a matter of doing business," continued Senator Webb. "The transfer of publicly supported proprietary technologies by American firms to China -- and potentially other countries -- clearly and unequivocally places the competitive advantage of the American economy at risk."

Examples of China profiting from U.S. taxpayer-funded technologies abound. They include technology transfer by nuclear power plant design and construction companies, the automotive industry, clean energy industries, and others sectors of the economy. In 2010, the United States Chamber of Commerce issued a report entitled "China's Drive for Indigenous Innovation," which noted that China's master plan for the development of science and technology "is considered by many international technology companies to be a blueprint for technology theft on a scale the world has never seen before." The report warns that China's "persistent" intellectual property theft is "compounded by the indigenous innovation industrial policies which compel technology transfers in order to have access to the China market."

In a January 2010 letter to Obama Administration officials, the heads of 19 U.S. business and industry associations -- including the Business Roundtable, the National Association of Manufacturers, and the Chamber of Commerce -- wrote of "[s]ystematic efforts by China to develop policies that build their domestic enterprises at the expense of U.S. firms and U.S. intellectual property."

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