I’ve worked with Chinese factories for over twenty years and here are some comments about this situation:
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In general, the security is pretty loose when it comes to allowing competitors to view each others development work.
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Often a factory will actually show a new account the work of an existing customer in an attempt to prove legitimacy. The factory tour is a very powerful selling tool. A good Chinese vendor will partition an area of the factory for new development and not allow tours in that area. A bad factory will show you EVERYTHING!
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I’ve seen factories work to develop a technology for one customer, then start shopping it around to everyone - thinking that they own it. You need to establish who owns the concept/technology up front to prevent this. It’s not an unspoken rule in China that your designs are your designs.
Of course these are generalizations and only my observations. They do not apply to every factory in China.
Know your partners before showing them new designs & technologies!!