Contract choices for importing and localizing equipment technology

With a common pursuit of major developments in designing and manufacturing technological equipment in China, a series of innovative projects has been accelerated in the past decade or so. To satisfy an increasing appetite for upgrading technology and localizing major equipment, Chinese enterprises have launched the “market for technology” and “combination of technology and trade” strategies – licensing, learning about, and improving the technology via importing and localizing, while carrying out procurements. The “Made in China” label has established a notable reputation, especially in the infrastructure and energy fields, such as high-speed rail, subways, nuclear power, etc.

In light of securing a smooth operation, either in the above-mentioned compartment localization or with procurements, a Chinese enterprise should give top priority to the contract provisions. Regardless of the varied status of development in a specific industry and the diversity of technology features, five key elements broadly apply to the negotiation of fair contract provisions.

Audrey Huang was a former general counsel at China General Consulting & Investment. She is now an arbitrator with the Beijing Arbitration Commission/Beijing International Arbitration Centre (BAC/BIAC). Case manager Terence Xu contributed to the English version