China · Before you sign
Chinese Supplier Sent Its Own NDA? What to Change Before You Sign
It arrives as a two-page PDF, often in English only. Sometimes it already carries the supplier's chop, its company seal. Signing it costs nothing and feels like progress. Before you do, check the document against the table below. Most supplier drafts fail on three lines. All three are negotiable.
The nine lines to check
Keep this table open while you read the supplier's draft. The third column is what the clause has to say to be worth signing. The last column tells you why.
| Clause | What the supplier's draft usually says | What it needs to say | Why |
|---|---|---|---|
| Non-use | Nothing. The document only limits disclosure. | The supplier may not use the information for its own products, for other customers, or under its own brand. | Disclosure and use are different duties. A supplier can make your product for itself and tell nobody. It will still have kept a standard NDA. |
| Non-circumvention | Nothing. | The supplier may not deal in your products with any customer you introduced, whoever makes the first contact. Name those customers, or point to orders and project files the supplier has seen. Each customer gets its own fixed period. | A ban on "approaching" your customers is easy to get around, because the customer can call the factory. If you resell the factory's goods, a ban on all your customers can be attacked. A court may see it as competitors splitting customers. See how to make the clause hold up. |
| Definition of protected information | Everything exchanged is confidential. Or only material marked confidential is. | A schedule naming the categories you will actually send: drawings, 3D files, BOM, firmware, test data, tooling specifications. | Under PRC law, protection depends on the owner taking confidentiality measures that fit the information. A definition that covers everything is a weak measure. |
| Subcontractors | Binds one company and stops there. | Written consent before the supplier passes anything on. The receiving company named. A matching confidentiality promise from it before anything is sent. | The PCB maker, the mold maker and the finishing shop will see the drawings. None of them signed your document. |
| Governing law and forum (where disputes are heard) | A foreign court, or nothing. | Chinese law, and a Chinese court or arbitration chosen with the supplier's assets in mind. | China recognises a foreign judgment only under a treaty, or on reciprocity (each country honouring the other's judgments), decided case by case. There is no such treaty with the United States. |
| Damages | Left out, or a token figure. | A sum or formula tied to tooling cost, development spend or unit margin. | A court may reduce an agreed sum that is too high compared with the loss. A number with nothing behind it is the easiest kind to cut. |
| Language | English only. | Bilingual, with Chinese controlling. | In a dispute, an English-only agreement gets translated by someone you did not choose. And the person who stamped it could not read it. |
| Term and survival | Ends with the business relationship. | A set period that continues after the purchase orders stop. | If confidentiality ends when the orders stop, it ends exactly when you need it. |
| Return and destruction | Nothing. | Return or certified deletion of files when the deal ends, with proof it was done. | It gives you a remedy that doesn't depend on putting a number on your loss. |
Four things in the draft that should stop you
A mutuality clause that is really a non-compete. Mutual drafts are normal when both sides share information. Read what the draft makes you do. Some of them stop the buyer from approaching other manufacturers.
Protection that depends on marking, with no marking procedure. Some agreements say material must be marked confidential before it is sent. Then the marking has to happen, and it has to say the right thing. An internal document-control stamp with no confidentiality wording may not count.
A company you have not checked. A document that arrives already chopped is an offer. It is not a settled position. Check the Chinese name on the chop against the business licence before you treat the company as bound. See checking a Chinese supplier.
Silence on who may hold the files. The draft may say nothing about subcontracting. The default rule in the law still helps. A contractor must do the main work itself unless the parties agree otherwise. It stays responsible for work it gives to a third party. If it did so without your consent, you may end the contract (Civil Code art. 772). That helps. Naming the chain of companies in the contract is still better.
What to give away
If you ask for everything, nothing gets signed. These concessions cost you little:
- A set term for commercial information, in place of confidentiality that lasts forever.
- Carve-outs for information the supplier already had, or that becomes public through no fault of its own.
- Real mutuality where the supplier is sharing its own process know-how.
- A sensible cap on liability, as long as the damages formula stays.
None of that weakens the nine lines in the table.
When you probably need a lawyer
You can work through the table yourself and send a marked-up version. Bring someone in when:
- the supplier refuses a change, and you can't tell if the point is worth losing the relationship over;
- the chain of recipients includes companies you can't identify;
- tooling or improvements are part of the deal;
- the document you received is really a manufacturing contract with an NDA's title.
Questions from overseas buyers
The supplier says its NDA is standard and cannot be changed.
Most supplier drafts fail on three lines, and all three are negotiable. Send a marked-up version of their document. If you ask for everything, nothing gets signed, so give away the points listed above. If the supplier still refuses a change you need, that is the time to bring in a lawyer.
Can I sign theirs now and put a proper NNN in place later?
You can, but it has a cost. (An NNN is a non-disclosure, non-use and non-circumvention agreement.) Under PRC law, protection depends on the confidentiality measures you took. If something goes wrong in the meantime, the document you signed is the measure a court looks at.
They have already chopped it. Does that change anything?
No. A document you have not signed is an offer. You are free to propose changes. You do need to check that the chop matches the registered company before you treat the company as bound.
Is an NNN just an NDA with extra clauses?
In form, roughly. In effect, the extra clauses are the point. Non-use stops the supplier making your product for itself. Non-circumvention stops it going around you to your customers. A document without them doesn't do the job most buyers think they are paying for.
Sources
Official texts cited in this article.
- Civil Code of the PRC (2020) npc.gov.cn
- Anti-Unfair Competition Law of the PRC (2025 revision) cnipa.gov.cn · in Chinese
- Supreme People's Court Provisions on Trade Secret Infringement Cases (Fa Shi [2020] No. 7) court.gov.cn · in Chinese
- Supreme People's Court Interpretation on the General Part of Contracts in the Civil Code (Fa Shi [2023] No. 13) court.gov.cn · in Chinese
Authorities: Civil Code arts. 490, 585 and 772; Anti-Unfair Competition Law (in Chinese) (2025 revision) art. 10; SPC Provisions on Civil Trade Secret Cases (Fa Shi [2020] No. 7 (in Chinese)) arts. 5–6; SPC Interpretation on the General Provisions of the Contract Part (Fa Shi [2023] No. 13 (in Chinese)) art. 65; Civil Procedure Law (2023 revision) art. 299. English renderings are unofficial. This is general commentary on PRC law. It isn't advice on your matter.
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