By John Huang of MWE China Law Offices, a separate law firm based in Shanghai. McDermott has a strategic alliance with MWE China Law Offices.
According to the People’s Republic of China (PRC) Ministry of Commerce (MOFCOM), 10,538 technology contracts were registered with MOFCOM with an aggregate value of $22.02 billion in 2006, an increase of 15.6 per cent from 2005. Fees received by foreign transferors of technology accounted for 67 percent of the total value (i.e., $14.76 billion). As the value of these technology contracts has increased, so has the PRC government’s wariness of foreign participation in many key sectors and its perceived potential to create technology monopolies in China held by foreign interests. For example, it is common practice for a foreign transferor to try to place substantial restrictions on the use of the subject technology in technology agreements. Under this scenario, relevant PRC laws try to balance the benefits of having a free flow of technology against the risk that it will distort competition. As a result, foreign investors must pay more attention to competition and antitrust concerns in their Chinese technology transfer deals.
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