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Technology

The opportunity

China is serious about new technology.  Universal access to basic healthcare, an improving IP environment, Chinese companies desire for innovation and substantial funding opportunities are opening up possibilities for New Zealand technology companies of all sizes.  Despite this, since the old days, the technology transfer and commercialization priorities have been US, EU and Japan.  Now, it’s time to engage with China. 

 

Challenges

China Tech is different 

Techtank experts from The Brookings Institution suggested, “Technology commercialization is not just a ‘trade issue.’ It is systemic. ” China’s efforts to support its own technology sector are engineered into the very sinews of its economy, spanning tax, subsidies, antitrust, procurement, standards, localization, and technology transfer.

The Chinese government shapes the tech market in deep and granular ways. Further, China is leveraging access to its large domestic market; whereas, other North Asian countries such as Japan and Korea have emphasized global export-led strategies and had more incentive to accept global rules.  From a New Zealand perspective, China technology transfer deals are facing the challenges around the Relationship and Deal Structure regarding “partnering” with Chinese companies.

 

Solutions

Technology Import and Export Catalogues

If you are new to China or if your business is considering bringing technology to China, your first house-call will be the Catalogue for Prohibited and Restricted Technology Imports (the ‘Technology Import Catalogue’), published by the Ministry of Science and Technology (MOST) in China and the Foreign Investment Catalogue, jointly published by the Ministry of Commerce (MOFCOM) and the National Development and Reform Commission (NDRC) in China.

Picking the Right Partners

It is important to recognize at the outset that part of the motivation for the Chinese company in a technology transfer is obtaining foreign technology and know-how. This fact is not a secret and you should not treat it like one. Consequently, as a first step to protecting your IP in a technology transfer, it is important to make sure you choose the right partners. Essentially, the ideal partner will be complementary, but not well-positioned to directly compete with your business. However, in order to make an informed decision, you need to take a closer look at your business as well as the potential Chinese partners.

Structure

Once you have selected the right partner, structuring your technology transfer is critical to effectively protecting your IP. The IP risk associated with a particular technology transfer will vary depending on whether you are licensing, setting up a JV, or setting up a WFOE. In all three of these situations, you need to prevent your IP from being inadvertently leaked or intentionally misappropriated or misused by a related or unrelated Chinese party.

 

Talk to us

Depending on the scope of the project, and the specific industry expertise it calls for, we may put together a small team drawn from our resource network of deeply experienced industry veterans.  Please contact us to see how we can help you commercialize your technology in China. 

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