China today accused top US chip maker Nvidia of violating its anti-trust law as high-stakes trade negotiations with the Trump administration continue.
The investigation of Nvidia, which was announced in December, will continue.
Chinese anti-trust cases against US technology companies used to be rare but Beijing now appears to be using them as a cudgel against Washington.
The two countries in recent years repeatedly have thrown regulatory punches at each other’s companies, with the US often asserting it is doing so on national security grounds.
Nvidia, which produces critical chips for cutting-edge artificial intelligence, has been buffeted by the US-Chinese fight as have many lower-profile multinationals.
The accusation against Nvidia was leveled as senior Chinese and US officials were holding their latest meeting aimed at reaching a trade agreement.
President Donald Trump on 11 August extended his deadline for sharp tariff hikes on Chinese goods for a further 90 days, allowing more time for trade negotiations.
Trump turned trade tensions into outright trade war by slapping a 10 percent tariff on all Chinese goods on 1 February and ratcheting up rates until he set them at mind-boggling 145 percent on 9 April.
Beijing hit back with 34 percent, then 84 percent, then 125 percent tariffs on American goods. It also added 11 more US companies to its “unreliable entities” list, barring them from doing business with Chinese state and private companies. In addition, the regime announced that the China division of US chemicals giant DuPont would be investigated for violating anti-monopoly laws and that imports of chicken from five major US agrobusinesses would be halted along with sorghum imports from a sixth US company.
Beijing’s most damaging retaliatory tactic was banning exports to the US of seven types of rare earth minerals.
China controls 90 percent of the global supply of rare earths, which are used to make critical industrial magnets.
Magnet shortages caused some automakers and other manufacturers in the US to roll back production.
Under the trade war truce agreed on 12 May, the Trump administration temporarily slashed tariffs on Chinese goods to 30 percent while Beijing rolled back its tariffs on US goods to 10 percent.
If the two sides reach a trade agreement, President Donald Trump and Chinese paramount leader Xi Jinping are expected to meet.
With US-Chinese relations at their worst in decades and government-to-government communications largely broken down, meetings between the leaders of the two countries are essential for keeping tensions from spinning out of control.
Even if a lasting tariff and broader trade agreement is attained, distrust and geopolitical friction between Beijing and Washington run so deep that commercial relations will remain unpredictable.
The Chinese regime has a long history of detaining local and foreign employees of multinational companies on trumped-up grounds, including for spying.
Given the utter lack of judicial independence in China, charges inevitably result in convictions.
Westerners of Chinese origin long have been particularly susceptible to arrest on dubious charges.
Risks of detention are highest for corporate personnel, academics and scientists with professional or personal links to the US military or other organizations inherently viewed with suspicion by the Chinese regime.
The regime could use any number of pretexts to detain foreign corporate personnel, including peripheral dealings with the Taiwanese military, violations of Internet and other censorship, witting or unwitting criticism of the Chinese authorities on social media, and breaches of environmental, health and other regulations.
Also, the extremely broad definition of state secrets makes it relatively easy to arrest foreigners for espionage.
The Chinese regime over the years has imposed exit bans on foreigners. The tactic often is intended to achieve outcomes favorable to Chinese parties to commercial disputes. Even foreigners not personally liable or who left a company in question years earlier have been hit with exit bans. Foreigners subject to exit bans typically are not aware of it until they attempt to catch a flight out of the country.
There also have been multiple recent reports of foreign business travelers from various industries being detained for a couple of hours or a bit longer at airports or hotels for “soft interrogation.”
Multinationals should not send anyone to China who the regime might have a pretext to detain. Routine background checks of prospective travelers are recommended.
Employees or prospective employees who multinationals are considering sending to China should be questioned about their understanding of the risks involved.
As a precaution, corporate personnel should travel to China in pairs or groups.
Multinationals and their personnel who visit China should be extremely careful not to breach the regime’s concept of state secrets, however nebulous that may be.
Personnel while in China should avoid infractions or indiscretions of any kind.
Tensions between China and Western governments should be monitored constantly.
