China Expands Trade Secret Rules To Include Data And AI To Prevent Leaks

China has expanded its trade secret protection framework to include data, algorithms, computer programs and source code, marking a significant regulatory shift aimed at safeguarding digital assets amid growing technological competition with the United States. The new rules took effect on Monday and are part of Beijing’s broader push to strengthen control over sensitive intellectual property in key emerging sectors.

According to state broadcaster China Central Television (CCTV), the updated Regulations on Trade Secret Protection issued by the State Administration for Market Regulation represent the first time Chinese law explicitly extends protection to such digital elements as proprietary trade secrets. The move reflects the increasing importance of data-driven assets in the country’s economic and industrial development.

The new framework introduces stricter security requirements for companies, particularly in areas involving remote work and cross-border collaboration. Businesses are now required to implement tighter controls, including restricting file access based on employee roles, concealing sensitive information, and monitoring user activity to prevent unauthorized disclosure or leaks of proprietary data.

Also Read: Trump Delays AI Security Order, Citing Concerns Over US Competitive Advantage vs China

The regulations also address trade secret violations committed outside China, although they do not specify enforcement mechanisms in cross-border scenarios. State media, including the Communist Party’s flagship newspaper People’s Daily, said the updated rules are designed to adapt to the realities of the digital economy, where data, algorithms and code have become core competitive assets for enterprises.

Alongside the regulatory update, Chinese authorities have launched a month-long enforcement campaign targeting sectors such as biomedicine, semiconductors and artificial intelligence. The campaign aims to curb “malicious poaching” of talent and prevent employees from transferring sensitive trade secrets when changing jobs, signaling tighter scrutiny over workforce mobility in strategic industries.

The broader policy shift comes as China intensifies efforts to protect domestic innovation and reduce the risk of technology leakage overseas. Recent government measures also include tighter oversight of outbound investment and restrictions on transferring sensitive technology or data abroad without approval, underscoring Beijing’s growing focus on securing its position in global technology competition.

Also Read: IMD Issues Yellow Alert for Mumbai, Pune: Thunderstorms and Gusty Winds Forecast Till June 3