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Dec 4, 2011

So you Want to Manufacture in China: Top Ten Things to Know Before You Go

This list is not intended to be exclusive. The list assumes that you will have a local company as your JV partner in this venture:
  • Register all Intellectual Property including your trademarks and patents in China. No - your E.U., U.S., Indian, Japanese etc. registrations are not enough; 
  • Due Diligence, Due Diligence, and More Due Diligence.  Read our many posts on this issue;
  • Complete a decent feasibility study. This does not mean simply running a cost estimate;
  • Consult a technical adviser;
  • Checkout and go through IPG's Stock Purchase/JV Due Diligence Check List;
  • Meet the Anticipated JV Partner and learn about the partner. A discussion on the phone is not enough either is a meeting over dinner. Have a local help with feeling the person out;
  • Execute a Non-Disclosure Agreement (NDA) in English and Chinese;
  • Execute OEM, Manufacturing, JV, Supplier, Shareholder Agreements as the case may be in English and Chinese. Don’t get them drafted by hacks or those who don't have experience in China. No, the lawyer you use in NY is not good enough;
  • Research or have researched benefits to manufacturing in the China Free Trade Zone (FTZ); and
  • Research or have researched benefits to manufacturing or employing people in certain areas of the country.