China issues order implementing United Nations sanctions on North Korea

This is even as Trump is expected to sign an executive memorandum Monday afternoon instructing his top trade negotiator to launch an investigation into Chinese intellectual property violations, a move that could eventually result in severe trade penalties.

The forced sharing of intellectual property with Chinese firms has been a long-standing concern of the US business community, with reports suggesting that losses stemming from it could total hundreds of billions of dollars annually that cost the USA economy millions of jobs.

"The Chinese don't like North Korea's nuclear programme, but the current situation does serve their longer-term interests in eroding American leadership, because it provides a whole new set of circumstances in which America shows its weakness", said Hugh White, a former senior defence strategist in the Australian government.

The move by Beijing is meant to send a signal to Washington, which sees China as one of the last defenders of dictator Kim Jong Un.

China-U.S. relations are at risk of being poisoned.

Trump's memo comes amid heightened tensions between the USA and North Korea and increasing frustration in the White House that China has not done more to rein in Pyongyang.

But in recent months, Trump has grown increasingly wary of getting any substantial aid from China, leading to the trade probe, as Axios has reported.

"The list of U.S. gains in trade with China can grow or shrink, depending on how trade issues are handled".

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Trump's call with Xi and his potential plans to open the broad trade investigation come against the backdrop of rising tensions over North Korea's nuclear and ballistic missile programs.

The US officials, however, said the North Korean issue and the investigation into China's trade practices are not linked.

The U.N. Security Council unanimously passed a resolution on August 6 banning North Korea's exports of coal, iron, iron ore, lead, lead ore and seafood, in a bid to choke off a third of Pyongyang's US$3 billion annual export revenue.

When asked about the delay in the call on Saturday, the officials did not address the question directly. For instance, it often requires foreign companies to enter into joint ventures with Chinese companies as a condition of doing business in the country, and requires them to share technology with those Chinese firms.

Earlier this year, an independent commission on USA intellectual property estimated that the annual cost to the US economy in counterfeit goods, pirated software, and theft of trade secrets from all sources exceeds $225 billion and could be as high as $600 billion. "This is why the president has chosen to act now and to act boldly", one administration official said. Xi, in his phone conversation with Trump, urged calm, the officials said.

USTR argues Beijing uses a range of practices to force USA companies to transfer IP, such as by granting regulatory approvals to drug makers that shift production to China or requiring that the designs of foreign products be replicable in China.

"China is widely recognised as the biggest source of the problem", he said.

  • Adam Floyd