China expands trade secret rules to shield AI algorithms and data from foreign access

New trade secret rules: China says its AI data is none of your business

Under new Chinese regulations, any algorithm, dataset or program not publicly disclosed now counts as a trade secret. Algorithms and computer programmes are now considered trade secrets by the Chinese government. 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.

China adds data and AI to trade secret rules to block leaks

Effective Monday, the Regulations on Trade Secret Protection mark the first time Chinese law protects such digital assets as proprietary secrets, according to state broadcaster China Central Television. China expanded its trade secret rules to include data and algorithms, as Beijing steps up efforts to prevent technology leaks amid intensifying strategic competition with the US. Effective Monday, the Regulations on Trade Secret Protection mark the first time Chinese law protects such digital assets as proprietary secrets, according to state broadcaster China Central Television. The move, from the State Administration for Market Regulation, represents the latest step taken by Beijing to shield technologies seen as new pillars of the world's second-largest economy. The framework details strict security requirements for remote work and cross-border corporate collaborations. Companies must now implement protective measures, including by limiting file access by employee rank, hiding sensitive details and tracking user activity. The rules also target infringement on trade secrets committed outside the country, though they did not specify how it would be enforced. The People's Daily, the ruling Communist Party's flagship newspaper, praised the measures for adapting to the digital era. "With the profound development of the digital economy, digital assets such as data, algorithms, computer programs, and code have become core trade secrets for enterprises," the newspaper said in an article last week. It noted that electronic intrusion and remote scraping now frequently threaten corporate secrets. Alongside the new rules, the market regulator launched a month-long enforcement campaign on Monday with a focus on key sectors such as biomedicine, semiconductor and AI. The agency vows to crack down on "malicious poaching" and employees who change jobs while carrying trade secrets. The legal push underscores Beijing's broader effort to lock down domestic innovation as China climbs the global value chain. On Monday, the cabinet released separate rules to strengthen oversight of outbound investment. Those regulations prohibit domestic investors from transferring restricted goods, technology or data overseas without prior approval. Companies are also banned from providing technical training that facilitates such foreign exports. Beijing is increasingly concerned about the loss of technology and talent overseas. In April, it ordered Meta Platforms Inc. to unwind its $2 billion acquisition of agentic AI startup Manus, which started out in China but relocated to Singapore. China is also restricting overseas travel for top AI professionals in private firms such as Alibaba Group and DeepSeek, Bloomberg reported.