The Chinese laws provides that for executives, managers or other  senior staff of the company, the employer may stipulate non-competition clauses in the empoyment contract. However, the law requires non-competition clauses shall be accompanied by the comensation terms. Therefore, it provides obligations for both employer and the empoyee regarding the non-competitions clause in the imployment contract under Chinese law.  

1. Where the mpoyee is in violation of the stipulation on non-competition clause, he shall pay a penalty for breach of contract to the employer.

2. The personnel under non-competition obligation shall be limited to senior mangers, senior technicians and other personnel who have the obligation to keep secrets in the entity.

3. The range, geographical scope and time limit for limitation on competition shall be stipulated by the employer and the empoyee. The stipulation relating to limitation of competition shall not violate any law or regulation.

4. After the discharge or termination of a labor contract, the period of limitation of competition for any of the persons to work for any other employer producing or engaging in products of the same category or conducting business of the same category as this employer shall not be more than two years.