China has shown an unprecedented rise as a technological powerhouse, aspiring to become the global leader in technological innovation by 2050. These ambitions offer great opportunities for European organizations that transfer technology from and to China. To effectively transfer technology to China, your organization is highly dependent on the latest policies and regulations implemented by the Chinese government.
Aiming to progress Chinese innovation capabilities and break its reliance on foreign technology, the Chinese government officially unveiled the indigenous innovation plan to turn the Chinese economy into a technology powerhouse by 2020 and global leader by 2050. In 2015, the Chinese government also launched “Made in China 2025” (“MIC 2025”), a state-led industrial policy that seeks to make China dominant in global high-tech manufacturing.
The Chinese government stimulates domestic innovation through incentives for companies (and employees) to innovate locally and to import and absorb foreign state-of-the-art technologies.
These dynamics create opportunities for European SMEs to exploit their technology in the Chinese market. At the same time, it poses substantial risks to organizations if these technology transfers are not well structured and documented. Therefore, foreign companies that decide to transfer technology to China should be fully aware of the regulations covering technology transfers and the application of China’s legal framework.
This guideline provides a comprehensive explanation of all the elements involved in transferring technology from China and to China. In addition, it offers recommendations on the Chinese business partner, the cooperation terms and on the Chinese government’s strategy with regard to transferring technology.
Technology transfer definition Prohibited, restricted and free technology import & export Import licence or registration of the technology transfer agreement Technology Agreement Tax implications Reverse Engineering & Unfair Competition Transfer in ODM Agreement Technology Transfer as Joint Venture Investment Transfer in ODM Agreement Technology Transfer as Joint Venture Investment Business Recommendations
About the author
Buren’s China Practice Team operates as an integrated team from Shanghai, Amsterdam and Beijing. They were the first Dutch law firm licensed in China (2004). Buren provides detailed law and practice advice on (international) technology transfers and IP (patent, trademark and trade secret) licensing and protection.