China Expands Scope of State Secrets Law in Push for National Security

New article concerning ‘work secrets’ may cause more uncertainty for foreign business in China.

A tower of security cameras (center L) are seen on The Bund past the Lujiazui financial district in Shanghai on May 23, 2023. Hector Retamal/ AFP via Getty Images

The Chinese regime has amended its state secrets law to expand the scope of information that authorities deem sensitive, which some experts say could cause more uncertainty for foreign businesses operating in the country.

The authorities have discussed the changes to the “Law on Guarding State Secrets” for months, and the final version of the law was published on Feb. 27, following approval by the top body of China’s rubber-stamp legislature, the National People’s Congress Standing Committee. The regime’s top leader, Xi Jinping, has signed an order to adopt the amended state secrets law, which will take effect on May 1.

The revision to the state secrets law comes as Beijing’s renewed focus on national security raised concerns among foreign investors and lawmakers. Over the past three years, China has introduced a sweeping data control law and expanded the anti-espionage legislation while its secret intelligence agency publicly called on citizens to be vigilant against foreign spies.

Changes to the state secrets law include the introduction of a new concept called “work secrets.” It’s broadly defined as information that is “not state secrets but would cause certain adverse impact if leaked,” according to the text of the law published online. It states that the specific rules addressing how to manage “work secrets” would be provided separately, without giving any timeline.

The revision also “clearly enshrined the Party’s management of secrecy into the law,” an official from the National Administration of State Secrets Protection told reporters, according to state media outlet Xinhua.

The unnamed official described the latest legal change as necessary, saying technological development and the changes in the domestic and international situation have brought “new challenges” in guarding state secrets.

The amendment also follows a massive trove of more than 500 documents from a Chinese cybersecurity contractor, I-SOON, leaked online, putting the regime’s cyber espionage operations worldwide under scrutiny.

The law’s revision “reflects from another aspect that Chinese society is now extremely unstable. That’s why the Chinese Communist Party always talks about ‘foreign hostile forces,’” Yao Cheng, a former lieutenant colonel in the Chinese military, told NTD, the sister media outlet of The Epoch Times.

“It wants to strengthen the control over the entire society through the state secrets law,” he said.

Heightened Risks for Foreign Firms

It’s the second time Beijing has amended the state secret law since it was enacted in 1988. The previous revision, adopted in 2010, had already met criticism for the vague definition of what constitutes a state secret.

Some China analysts expressed concern that the new provision concerning “work secrets” could elevate risks for individuals conducting business in China.

“Calling for the protection of these documents ... may lead to overzealous identification of ‘work secrets,’ harming both the public’s right to know and exposing workers to increased risk,” Jeremy Daum, a senior research scholar at the Paul Tsai China Center in Yale Law School, said in an op-ed released on his website, China Law Translate.

In recent years, Chinese authorities have clamped down on foreign firms, including raids of management consultancies’ offices and slapping them with heavy fines.

Last year, Chinese police detained five local employees of Mintz, a U.S. corporate due diligence firm, and closed its office in Beijing. Authorities also formally arrested an executive of the Japanese drugmaker Astellas on suspicion of spying.

In January, China’s Foreign Ministry confirmed that a UK national was sentenced to five years in prison in 2022 on allegations of espionage.

During a visit to China in August 2023, U.S. Commerce Secretary Gina Raimondo said American companies have raised concerns to her about China becoming “uninvestable.” They cited a sharp increase in the risk of conducting business there, driven by factors such as revisions to counterespionage laws and raids on foreign firms.