U.S. senators introduce new bill to punish Chinese technology theft

(Reuters) - A bipartisan pair of U.S. senators on Thursday introduced legislation that would require Republican President Donald Trump to more systematically punish China for stealing U.S. technology.

FILE PHOTO: Sen. Christopher Van Hollen (D-MD) introduces Rod Rosenstein, nominee to be Deputy Attorney General, prior to his testimony before the Senate Judiciary Committee on Capitol Hill in Washington March 7, 2017. REUTERS/Aaron P. Bernstein

The bill requires the president to give Congress periodic updates on foreign companies and individuals that steal vital U.S. trade secrets and mandates the leveling of penalties, including economic sanctions.

The legislation was introduced by Democratic Senator Chris Van Hollen and Republican Senator Ben Sasse.

Van Hollen told Reuters the bill was a “direct approach” to combating China’s use of illicit methods for acquiring rapid technological advances.

“I think there is a big deterrent benefit to making it clear upfront that when we find this kind of theft, there will be penalties,” Van Hollen said.

The Chinese government has repeatedly insisted Washington has exaggerated the problem of intellectual property theft for political reasons, dismissing the industrial espionage allegations as groundless.

Van Hollen and Sasse’s bill would require the president to send a report to congressional committees every six months.

The biannual report to Congress must list individuals or companies involved in serial theft of U.S. trade secrets that threatens U.S. national security or economic health.

The legislation also requires the president to impose penalties on those companies, including “blocking sanctions” that generally freeze American assets and bar doing business with a U.S. business or person.

The United States has long asserted that China fails to protect American intellectual property and steals it or forces the transfer of it.

Trump has retaliated against Chinese intellectual property and trade practices by hiking tariffs and imposing limits on companies like Huawei Technologies Co [HWT.UL].

A Senate report released in November found that federal agencies responded too slowly as Beijing recruited U.S.-based researchers to transfer intellectual property from American laboratories, leaving U.S. taxpayers unwittingly funding China’s economic rise.

Reporting by Jan Wolfe in Truro, Massachusetts; editing by Jonathan Oatis