Question

The case mentions a potential legal issue many companies have in doing business with Chinese companies-the potential for loss of trade secrets and intellectual property rights. What other essential information do you think is necessary for companies to investigate before committing to do business with a firm based in China?

Answer 1

Other necessary information to be investigated are as follows:

1. Repatriation of income earned from the business conducted through the firm based in China. Some part of the profit can be reinvested if required as part of the policies in China.

2. Robustness of the assured quality confirmation by the Authorities in China so that quality is always warranted and trade sticks to the specifications.

3.  Issue of default from the Chinese firms as well as protection given by the Chinese authorities to the overseas firm.

4.  Scope of tapping of the communication and misuse of the intercepted information by the authorities

5. Scope of Chinese firm learning the trade secrets and enter the domestic market of overseas firm

Above information must be investigated by the firm before doing business with a firm in China.