As U.S. President Donald Trump claims his administration is nearing a trade deal with China, one possible deal breaker has been China's disregard of intellectual property protections and claims dating back years about rampant Chinese theft of corporate trade secrets.
A new poll of American executives suggests there may well be at least a grain of truth to those claims.
One in five North American-based corporations on the CNBC Global CFO Council says Chinese firms have stolen their intellectual property within the last year. In all, seven of the 23 companies surveyed say that Chinese firms have stolen from them over the past decade.
As the Trump administration works on a trade deal with China and hundreds of billions in potential tariffs loom if a deal can't be reached — Trump has delayed the tariffs scheduled for Friday, based on "significant progress" he said is being made — the issue of IP theft has been a huge sticking point.
The council represents some of the largest public and private companies in the world, collectively managing nearly $5 trillion in market value across a wide variety of sectors. The survey was conducted between Feb. 7 and Feb. 22 among 54 members of the council located across the globe, including the subset of North America-based chief financial officers.
U.S. Trade Representative Robert Lighthizer said on Wednesday in testimony on Capitol Hill that a deal with China must not only include more Chinese purchases of U.S. products but enforcement. There have been recent reports that Lighthizer is unhappy with Trump's willingness to make a deal with the Chinese without extracting strong enough terms. White House officials have downplayed the reported tensions.
There are no exact statistics on trade secret theft ranked by nation, but China remains the world's principal IP rule breaker across all types of IP theft, according to a spokesman for the IP Commission, which estimates up $600 billion annually in cost to the U.S. economy from these actions. The IP commission noted that Chinese citizens are prosecuted most frequently in U.S. courts for trade secret theft.
