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Algorithms and computer programmes are now considered trade secrets by the Chinese government.
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The new regulations, called “Trade Secret Protection,” went into effect on Monday. The rules say that any “information related to technology, such as structure, raw materials, formula, materials, samples, patterns, processes, methods, data, algorithms, computer programmes and codes,” is considered a trade secret.
Technical or business information that “is not publicly known, has commercial value,” and is confidential also falls under the regulation.
Anything that has already been described in the media or in open reports is not considered a trade secret.
The regulation sets out strict measures for remote work and cross-border collaboration, including access controls, data anonymisation to mask personally identifiable information, and detailed logs of who has accessed, copied or modified data.
People or companies can report whether their trade secrets have been divulged, and if an investigation by China’s State Administration for Market Regulation (SAMR) confirms that, a fine of up to 5 million yuan (€630,000) could be issued.
The regulations are China’s latest move to protect AI secrets. Earlier this month, Bloomberg reported that the government is restricting the movement of its AI talent and, in May, Beijing blocked Meta’s acquisition of China-founded Manus, one of the country’s top AI companies.
This week, China also issued sweeping new rules to tighten overseas deals that involve Chinese investors, technology, data and national security.
The new regulations are the first update to China’s trade secrets rules since 1998 and now explicitly mention AI and data as falling under the law.
The Chinese state is conducting what they call a “Enterprise Trade Secret Protection Capacity Enhancement Service,” month in June, as they have every year since 2023.
During the month, they will hold business trainings to “cultivate awareness” and conduct risk assessments with the new regulations.