Rules of process outsourcing in China

#1
Hi All,
I am recently researching the restrictions on the relationship between a foreign company and a domestic company in China.
I tried to summarize my understanding as follows, as well as some questions. Please feel free to comment or point out anything incorrect. Any practical experience of OEM in China is also appreciated. Thank you!


A foreign registration applicant may outsource its manufacturing process to a company in China

-- According to the draft of "Measures for the Administration of Registration of Medical Devices", the restriction of manufacturing outsourcing on non-innovative medical devices is to be removed. That is, registration applicants will not be required to have manufacturing ability.
-- A new revision of "Regulation on the Supervision and Administration of Medical Devices" has been issued in March 2021. An important change to it is to fully implement the "Marketing Authorization Holder (MAH) Policy", which means the registration certificate holders should bear the responsibilities of the safety and effectiveness of devices during the entire lifecycle and implies they may be allowed to entrust any process to other companies through "entrustment of production" (excluding high-risk implantable devices). "Production" is defined as the activities of design, processing, manufacturing, assembling, and final product provision in the draft of "Measures for the Supervision and Administration of Medical Device Production". Although both the draft and the new regulation seem not to define the entrusted company as a company in China, they constantly mention "the medical products administration (MPA) of the province where the entrusted company located".
Therefore, my interpretation would be: MAHs may be allowed to entrust any process to other companies located in China. However, no more information could be obtained until formal approval.

Question #1: Are there any rules that explicitly allow or ban a foreign registration applicant to outsource its manufacturing process to a company in China?
Question #2: For a foreign company to manufacture products (non-invasive/non-sterile Class II medical device) in China, is technology transfer the only way out?
Question #3: For a domestic company, are there any rules on outsourcing of design control process to a foreign company?
 
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#2
generally, MAH is only applicable for China domestic company outsource the manufacturing process to a company in China.
For a foreign company to manufacture products (non-invasive/non-sterile Class II medical device) in China, it has to register a company in China to produce the device or outsource the manufacturing process to another company in China.
For a domestic company, if only outsource design control process to a foreign company, but the manufacturing process is still in China, the QMS audit might be complicated, but it could work. It has to be discussed with the authority.
 
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