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China Non Disclosure Agreements (NDA). Done ALL The Time.

Posted in Basics of China Business Law, Legal News

Just responded to an email from a client that went something like this:

A couple of the potential manufacturers to whom we are showing the NDA you did for us are saying that “we don’t respect” them and that these sorts of agreements are “not done in China” in the _____ industry.  Is this true?

My response was as follows:

China Non Disclosure Agreements are quite common and they tend to work very at protecting confidential information.

Chinese companies often say that something isn’t Chinese as a way to avoid it.  What I always say about NNN Agreements (what we call our NDAs) is that we have done about 300 of them.  Maybe 148 times, the Chinese company just signs it.  Around 147 times, the Chinese company suggests reasonable changes and then signs it.  About five times, they say “this is never done in China.”  I then tell our client that can’t be true and we have our own proof of it — the 295 out of 300 times that we got one signed — and that the Chinese manufacturer saying that is a very bad sign.

 Nothing unusual about the ____ industry either.
  • James Guzzo

    I work in quality control here in China, and also do some select sourcing projects for my clients. I have to say I’m impressed by your record of getting NDAs signed – I have a tough time with it myself. I think when sourcing, factories are reticent to sign an NDA because it signals to them right from the start that this client will probably be very mafan.

    • http://jacobyount.com/ Jacob Yount

      In agreement with you, James. I work in a lower-cost industry and
      anything that requires the factory to think more in-depth or when
      something looks like it is going to knock them out of their routine,
      they almost prefer not to bother with it.