Working with a manufacturer in China without a suitable written agreement can expose your business to risks involving intellectual property, tooling ownership, unauthorised subcontracting, late deliveries, unexpected price increases, and poor-quality production.
However, the value of a good China manufacturing contract does not begin when you need to sue a supplier. Its most important role may be much earlier: forcing both parties to agree, in writing, on exactly what is expected before development or production begins.
In this CMD Gold episode of China Manufacturing Decoded, we revisit a practical discussion between Adrian and Renaud about the agreements importers and product developers should consider when working with Chinese suppliers.
They examine the roles of NNN agreements, Product Development Agreements, and Manufacturing Agreements, as well as the provisions that may be needed to protect your product, IP, tooling, quality requirements, and ability to move production elsewhere.
They also discuss why manufacturing defects and design defects must be treated differently, why the longest supplier agreement is not necessarily the most effective, and why important commitments should not be scattered across emails, calls, and WeChat messages.
Please note: This conversation originally aired in 2020. Chinese law and its application have evolved since the original recording, so this episode provides practical manufacturing guidance rather than current legal advice. Any agreement you intend to rely on should be drafted or reviewed by appropriate legal counsel familiar with current Chinese law and your specific circumstances.
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Podcast sections
- 00:00 – CMD Gold introduction
- 01:29 – Why do buyers work with Chinese suppliers without contracts?
- 03:16 – Why overseas buyers can underestimate supplier risk
- 05:52 – What does a manufacturing contract actually do for you?
- 10:13 – Other agreements new-product buyers should consider
- 12:46 – Product development agreements and IP ownership
- 16:27 – What is an NNN agreement?
- 17:33 – What should a manufacturing agreement cover?
- 23:09 – When NNN and development agreements may not be necessary
- 24:45 – Subcontracting, factory access and inspection rights
- 25:47 – Manufacturing defects vs design defects
- 28:22 – Field failures, termination and how detailed the contract should be
- 31:30 – Why supplier agreements shouldn’t live in WeChat and email
- 33:23 – CMD Gold 2026 takeaways
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- Transfer Manufacturing to a New Chinese Factory With Fewer Risks
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Disclaimer
Sofeast is not a law firm, and the information in this episode and article does not constitute legal advice. The discussion is based on practical experience working with buyers, product developers, and manufacturers in Asia.
Chinese law and its application have evolved since the original conversation was recorded in 2020. Consult a suitably qualified lawyer who understands current Chinese law, international manufacturing arrangements, and the specific facts of your situation before drafting, signing, or relying on an agreement.
