[News] Netherlands-China business week: dos and don’ts

As intellectual property is important to both the Dutch and the Chinese economy, Reinout van Malenstein, Senior Counsel at HFG, is invited by the Dutch government as IP Expert of the European Commission China IPR SM Help desk,  to speak in the plenary session on Tuesday 28 September on intellectual property. Furthermore, he will give a workshop later that same day where the do’s and don’ts of intellectual property protection in China will be addressed. 

Trade between Netherlands and China

Trade between The Netherlands and China is booming. The export from Netherlands to China is valued at more than 14 billion euro, and the import more than 44 billion euro.

Furthermore, The Netherlands ranks number six on the World Intellectual Property Office (WIPO) 2021 list of most innovative countries (Global Innovation Index, ie. GII). China ranks number 12 on that same list. WIPO’s Global Innovation Index ranks the innovation ecosystem performance of economies around the globe each year while highlighting innovation strengths and weaknesses and particular gaps in innovation metrics. 

See the full list, with Switzerland ranking number 1, here.

Seen the trade numbers and the ranking on the GII, it comes as no surprise that the Dutch government encourages trade between China and the Netherlands and organizes a yearly China Business Week in order to inform Dutch entrepreneurs how to take advantage of the business opportunities in the Chinese market. 

See the information regarding the China Business Week here. 

So, what are some of these dos and don’ts for doing business?

Dos and don’ts 

Intellectual property protection

First of all, intellectual property protection in China means that intellectual property rights and trademarks and patents actually will need to be registered in China.  If there is no local applied right in China, in general, companies do not have any protection. Therefore, registration is key.

Furthermore, as China is a first-to-file country, being the first to register these rights is crucial. If another company beats you to it, it can mean that they have the legal rights, and it might be hard and/or costly to get these back.

Social credit system

The social credit system is another important part of doing business in China. Entrepreneurs need to be aware that what they communicate as their company or as private persons, might have an effect on the company and individuals. If entrepreneurs say or do something against Chinese law, that might immediately impact their ways of doing business in or with China. As such, companies are advised to prepare a firm-wide approach to doing business with China. See for more information in this article: Social Corporate credit system: what companies need to know.

Data protection

China has recently enacted various Data protection laws. The laws are different from the GDRP, and have a huge impact on how data is regulated in China and abroad. As such, companies will need to check if the current practices are in line with the law, before any official actions of the Chinese government are launched against them for non-compliance. See articles on this here: DataSecurity Law, ChinaBig Data Era, Didi:The first cybersecurity review in China.

Contracts

When doing business, do make sure that there is an NDA (Non-Disclosure Agreement) signed before confining your (potential) partner of any know-how. Without such a contract you are giving away your know-how and it will become unprotected.

Finally, be aware to have the right jurisdiction and court/arbitration choices clearly written out in your contract. Dutch entrepreneurs might be more at ease with an agreement under Dutch law, however, ask yourself if this contract would work under such construction in case there are any problems. In certain instances, a contract under Chinese law would work better.

We look forward to a great China Business Week.