Moving your manufacturing Out Of China

This is the first in what will be an ongoing series of posts we will be writing on how to move your manufacturing from China.

The South China Morning Post did a story yesterday whose title says it all: Coronavirus could be ‘death blow’ for many of China’s small manufacturers if not under control by April. The article itself consisted mostly of interviews with Chinese factory owners who talked about how bad things are for factories in China right now and how if things do not improve by, variously, the end of February, March or April, we should expect massive numbers of them to go under.

Judging by what our international manufacturing lawyers are hearing from our own clients, these predictions are likely spot on. We have clients that have already moved their manufacturing from China and we have clients that are in the process of moving their manufacturing from China and we have clients that are looking to move their manufacturing from China. And we even have some clients with no interest (at least pre-coronavirus) interest in moving their manufacturing from China. This series is intended for those companies looking to move their manufacturing from China, probably the largest and most sensitive of the categories.

About once a week now we are getting emails or phone calls from foreign companies that moved their manufacturing from China and have just learned that their former manufacturer in China is selling their products directly to the foreign companies’ own customers or to the world or have just realized that this is what their former manufacturer will soon be doing. These companies want to know what we can do to help them and FAST.

There is only so much we lawyers can do for a company in the situation above, but there is a heckuva lot more we can do for companies that come to us BEFORE they say goodbye to their Chinese manufacturer and we will in the next week or so be discussing those things. For now, just realize that you need to plan well in advance for terminating your China supplier. And by plan in advance, I mean you need to secure your molds and all of the product for which you have already paid before you do anything that might tip off your China supplier regarding your plan to start manufacturing elsewhere. And you need to protect your intellectual property and your people and your customers and even your ability to return to China for manufacturing someday. We will explain all this in detail in our coming posts.

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Photo of Dan Harris Dan Harris

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network. 

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network.  His work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

He was named as one of only three Washington State Amazing Lawyers in International Law, is AV rated by Martindale-Hubbell Law Directory (its highest rating), is rated 10.0 by AVVO.com (also its highest rating), and is a recognized SuperLawyer.

Dan is a frequent writer and public speaker on doing business in Asia and constantly travels between the United States and Asia. He most commonly speaks on China law issues and is the lead writer of the award winning China Law Blog. Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed Dan regarding various aspects of his international law practice.

Dan is licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at his firm, Dan focuses on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.