Is “technology theft” the reason of US tariffs, or just an excuse?

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Alleged intellectual property theft is just the US’s excuse to impose a raft of tariffs on China, said Chen Jiahe, chief strategist at Cinda Securities.

The Trump administration raised the stakes in a growing trade showdown with China, targeting 25 percent tariffs on about 1,300 industrial technology, transport and medical products to try to force changes in alleged intellectual property practices.

But Chen said that “technology theft” is just an excuse as the technology property is actually under contracts.

“US agreed to sell technology to Chinese companies in the past, and we give them money and market shares, so they were all agreed in the past. So I think that just one reason to start a fight,” said Chen.

‍Chen Jiahe, chief strategist at Cinda Securities. /CGTN Photo

Trump administration pushed ahead tariffs plans because of the large trade deficit, according to Chen, but China does not want to escalate trade dispute.

“You have to consider that China has not much things to do with the trade surplus recently. Why do we need such much money?” said Chen, “We get US dollars, and we invest them in the US treasury, then get two to three percent return per year. So we are not getting too much from US either.”

Global supply chains, overseas investments, FTAs China has voiced opposition against the proposed US tariffs in a strong tone. China's tax administration has unveiled a new list of targeted American goods on Wednesday. China will raise tariffs 25 percent on 106 products, covering 14 areas.

Some analysts concerned the trade dispute will affect Chinese firms, but Chen suggests investors to look at the positive side.

“Chinese stock market is offering 0.8 times P/B Ratio again, one of the lowest in the history, it caused by this kind of trade wars. It gives you good opportunity to buy,” Chen added.