Limiting the dangers of importing technology

China has seen a substantial increase in technology import businesses and has rolled out a series of incentives over the past several years to further encourage the transfer of key know-how into its domestic market. In fact, Liu He, former vice-chairman of the Development Research Center of the State Council, wrote in 2013 that, China's strategic opportunities to acquire cutting-edge technology and invest in infrastructure truly manifested after the 2008 global financial crisis when the country exerted a great influence on the world's economic recovery.

But acquisitions, transfers and import of such crucial and competitive technology are not without challenges. Improper navigation and handling of regulatory and commercial risks can not only break a deal, but can also result in heavy costs for both the importer and exporter for years to come.

“Technology acquisition” refers to the import of technology by China from developed countries. And, more specifically, according to the PRC Regulations for the Administration of Technology Import-Export, “technology import” means the act of transferring technology into the country from abroad by way of trade, investment or technical and economic cooperation. Such acts include the transfer of patents, patent application rights and licenses, know-how, technical services and other manners of technology transfer.