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Ten Must-Dos For Successful China Product Manufacturing

Posted in Basics of China Business Law, Legal News

A reader directed me to an excellent article in Material Handling & Logistics Magazine, setting out the basics for succeeding at outsourcing product manufacturing to China.  The article is by Michael Zakkour of Technomic and it is called The Ten Rules for Contract Manufacturing in China.

The article starts out by noting that “there are three overarching ‘must haves’ for producing/buying in China: a good supplier, a good contract and good IP protection.”  It goes on to say that if “you pay attention to the tiniest of details on all three you will likely have a profitable experience,” but “small lapses in any of the three could spell disaster.”  I completely agree.

It then maps out ten “simple rules to follow,” of which I will be discussing only the following, which are all legally related.

  • “Register all of your trademarks, copyrights and patents in China. China is first to file, not first to use. If you are not diligent with this, you will at some point lose your IP.”  I 100% agree.  See File Your Trademark In China. Now.

For more on best methods for China product manufacturing, check out the full article here.

  • Zvi Shalgo

    This is a good piece of guidance for newcomers to China. Based on my experience, I would say that the key point is to find a reliable and qualified supplier. On-site checking and industrial documents/certificates are required and useful
    to identify. Too many companies get involved with partners who may offer better prices, but the unreliable returns cause many more problems down the road.

  • http://twitter.com/theeastasiaco East Asia Co.

    Dan:
    This blog is wonderful and there is a ton of useful information advice here as everyone knows. I don’t even need to say that because it is so obvious. However one thing I don’t understand is why you are constantly preaching to companies to register and to attempt to protect their IP in China without qualifying this advice by saying,…”if you have the means to do so.” The fact is that it is expensive to hire an international law firm such as yours to handle trademark, copyright, patent registrations in China and many small companies just do not have the resources to do this – even if they would like to ( I am talking here about companies that source in China) I know because half the companies I work with are like this. They are very small companies – often run out of someone’s home – that can barely afford to get on a plane and go to China to visit a vendor or inspect an order. If one of these people had to choose between inspecting an important order that would put them on the map or registering their IP in a country where even registered IP is vulnerable, what would be the smart thing to do ? I would argue that they need to get on the plane and go inspect their order. If you were to say, well, maybe these people are not ready to do business in China, I would counter that by saying sourcing in China is the only hope these people have to build a business. They have to try, imperfect as it might seem sometimes.

    I think registering IP in China is a good idea for companies that can really afford to do so. I do not disagree with your advice here. Unfortunately there are many small companies out there that just cannot afford it and so I think the better advice is always to qualify these statements with “if you can possibly budget it I would strongly advise …” or something along those lines.