Outsourcing to China – Risks and benefits

With the rewards of outsourcing technology to China come risks of loss or misappropriation of intellectual property (IP) rights and trade secrets. This article outlines the ways in which companies can balance benefits and risk by addressing: IP and technology transfer rights, the business and legal environment in China, contractual arrangements, pre-emptive legal protections, and understanding the rules relating to IP creation by employees or outsource suppliers. Once foreign firms understand the legal and practical issues addressed in this article, and how to navigate them, they can decide whether or not to move valuable projects to China.