A Complete Guideline on Developing Proprietary Products in China


China Manufacturing

Proprietary products or services allow businesses to develop customer loyalty and continuously build on their offerings. When you’re taking advice from the financial institution on the purchase of proprietary products, check if the institution promotes third-party funds. You may be limiting your chance of building your asset with the institution if it only offers proprietary products.

It is suggested to enquire what will happen to the asset if you move your account away from the institution that issued it. There are proprietary investments that are not portable. As a business owner, you might have to sell them before going to another firm. This may result in a capital gain/loss.


NNN agreement could prove to be a vital element if you wish to produce your proprietary products in China. NNN agreement should be written to be enforceable in a Chinese court with jurisdiction over the Chinese defendant. This means that Chinese law is the governing law, Chinese is the governing language, and exclusive jurisdiction is in a Chinese court with jurisdiction over the defendant. the China-specific Non-Disclosure, Non-Use, and Non-Circumvention Agreement (NNN) and accompanying Original Equipment/Design (OEM/ODM) Manufacturer Agreements. These agreements are used to protect your confidential information and to prevent your Chinese manufacturer from competing with you or going around you to your customers or vendors. In other words, they make sense for almost every company doing business with China.


Protecting the IP and Trademark of your Proprietary Products

China has become one of the world’s major IP jurisdictions. Innovation and IP protection have been encouraged by the Chinese government. Foreign companies can register IP in China for trademarks, patents, designs and copyright. However, each of these is administered by a different government body. The primary law in China pertains to copyright. This protects copyrighted works of foreigners that are either first published in China or in countries that are signatories to the World Intellectual Property Organization (WIPO) copyright protection treaty.


Manufacturing price that sounds too good to be true might be a trap for the scammers. Inexperienced importers fall victim of the deception and select the cheapest price. They have no idea that this move is going to cost them dearly at the latter stages. Most of the time foreign importers are lured with amazing product images and unrealistic assurances by the manufacturers and the importers went on to make the deposit without visiting the factory.


Dispute Settlement

Under the international trade law, there are different provisions for dispute settlement which is done with the help of WTO and GATT. It was governed by Article XXII and XXIII of the GATT, which set up a system of consultation for the settlement of disputes among the member nations. The dispute settlement system evolved over time, and there were additional documents, and legal instruments were created to incorporate changes. Even with certain changes, the dispute resolution mechanism was not considered satisfactory. International Trade laws deal with certain subjects which are inclusive to all the member nations under the WTO.


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China’s Support Policies for Domestic & Foreign Businesses in the Covid-19 Pandemic Era

To cushion the economic hit caused by the COVID-19 outbreak, China’s central and local governments have been rolling out a series of supporting policies to shore up the confidence of businesses and ease some of their compliance burdens. Businesses in China, including foreign-invested enterprises (FIEs), can leverage these special policies to overcome the difficulties caused by COVID-19.


In 2020, we see opportunity and fast development in capital markets, investment, insolvency and restructuring, IP, anti-trust, and dispute resolutions. Since people are adopting the remote life and working style, data protection and compliance requests soar, attracting lots of attention.


The state council executive meeting, 18th of February, 2020

Phased reduction and exemption of corporate social insurance fees and implementing the policy of payment delaying of housing fund by enterprises: “In order to reduce the impact of the epidemic on enterprises, especially small and medium-sized enterprises, in all provinces except Hubei province from February to June, small and medium-sized enterprises can be exempted from endowment insurance, unemployment insurance, and industrial injury insurance, and from February to April, large enterprises can be reduced by half; Hubei Province can be exempted from February to June for all kinds of insured enterprises. At the same time, before the end of June, the enterprise can apply for delaying the payment of the housing provident funds. During this period no overdue treatment will be made for the provident fund loans that the employees fail to repay normally due to the impact of the epidemic.”


State Council: Introducing Strong Financial Measures to Help Smaller Firms Resume Production and Operation (CN/EN) The State Council executive meeting on February 25, 2020, unveiled a string of measures to support SMEs. For eligible SMEs, financial institutions will be encouraged to provisionally defer their principal loan repayments. Their interest payments can be deferred to June 30, with penalty interest payments exempted.


Employment Matters

Since the outbreak of severe acute respiratory syndrome coronavirus 2 (“COVID-19 virus”) and the adoption of response measures by government authorities at national, provincial, and municipal levels, manufacturers have probably most focused on employment issues, such as the resumption of work, levels of compensation, and, sometimes, layoff options. Over the past six weeks, PRC authorities at the national and local levels have issued guidance for employers with respect to the resumption of work and the entitlements of employees. On January 24, 2020, the Ministry of Human Resources and Social Security issued the Notice on Labor Relations under the COVID-19 Situation (the “Labor Notice”)


In essence, the pandemic won’t reshape international relations, but it will accelerate history. Besides the impact of COVID-19, we should fully realize the pressure from the structural competition between China and the U.S. and the bump of deglobalization and respond accordingly.


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