China Intellectual Property is an important topic. First a quote.
Dan Harris of China Law Blog says,
“In most cases, the foreign company’s IP is stolen by an insider.”
This is no surprise to me. I know I am banging the same drum old drum, but if you are hiring by resume and interview, then you have 30% of your staff who are actively against you.
That is IP risk to the moon. So any legal means you have to protect yourself will not work. There are many invisible ways to steal IP.
I remember one company where they spent lots of money on equipment so people could not stand outside the factory and get fed IP short range from managers inside the factory. In the meantime, they had horrible Chinese managers who made everyone miserable. No equipment they could buy will solve that risk.
China Intellectual Property Must be Protected From the Inside
You must dramatically change any hiring you have do in China to change the risk factors in your company. That will not just lower your IP risk. It will improve engagement. When engagement is very high, your IP does not run away and productivity goes up all around. Also, take a look at China and Compliance: A Way To Get There.
Engagement does not soar because you have teamwork and engagement training. Engagement soars because you foremost hire managers who are leaders who really care and lead. When you get the right leaders and consistently and throw the bums out, your productivity soars and your IP risks go down.
An R&D note. R&D work is valuable in China as China has invested a lot in training engineers. Fear does not have to rule here. Wisdom should govern however. People do not steal from people they care about and who care about them and their family. So have workers sign well researched confidentiality agreements and even non competes when needed. Non competes require you to spend money in China. However, none of that is as important as hiring the right leaders. You need integrity, care for workers, and talent in each hire. Then you must care and so must they. Then your IP will really be much safer.