The legal and practical aspects of technology transfer are of increasing importance as China's international economic relations expand. Chinese legislation on aspects of such transfers are beginning to appear and this paper discusses relevant regulations particularly the Technology Import Contract Regulations of May 1985. Practical issues include Chinese interest in up-to-date technology and comprehensive technical documentation, valuation of the technology to be transferred, payment terms, the terms and costs of technical training, and acceptance tests of the products manufactured using the transferred technology. Patent infringement and protection of proprietary information are also issues of concern to companies involved in technology transfer transactions. Such transactions may also be complicated by the blurred lines of authority that exist in China. The new Chinese Trademark Law provides more comprehensive protection to both the foreign investor and the consumer than its predecessor. The recently promulgated Patent Law also eases some of the previous uncertainties, but careful negotiation of contract clauses remains essential. If China sustains a long-term commitment to import technology, the legal framework for transactions should continue to develop and increase in definition. However, problems arise from differences in the legal cultures of the participants.
Stanley B. Lubman,
Technology Transfer in China: Policies, Practice and Law,
China's Economy Looks Toward the Year 2000, Volume 2: Economic Openess in Modernizing China, Selected Papers Submitted to the Joint Economic Committee, Congress of the United States
Available at: https://scholarship.law.columbia.edu/chinese_legal_studies/11