China Expands State Secrets Protection to Include 'Work Secrets' in New Law Revision

China Expands National Security Measures

In a move to strengthen its national security measures, China has expanded the protection of state secrets to include a broad category of "work secrets." This decision was formalized when Chinese President Xi Jinping signed an order to adopt revisions to a law on "Guarding State Secrets."

New Definitions and Concerns

The new rules, which will come into effect on May 1, expand the precautions for state secrets to also encompass unclassified information known as work secrets. These work secrets are broadly defined as information that could have an "adverse impact" if leaked. Jeremy Daum, a senior fellow at Yale Law School's Paul Tsai China Center, expressed concerns about the potential misuse of the article on work secrets. He highlighted the risk of individual departments overzealously identifying matters as 'work secrets,' leading to limitations on the public’s right to know and potential legal consequences.

Foreign Business Concerns

These developments have raised concerns among foreign businesses operating in China. The lack of clarity in the new regulations is seen as an unquantified risk to doing business in the country. There is apprehension that the addition of work secrets, along with the vague mention of information becoming secret only after being aggregated with other information, could inadvertently lead to the infringement of secret information by foreign businesses. Despite the potential challenges, foreign businesses have continued to operate in China amidst the stretched protection of state secrets. However, the lack of clarity remains a significant concern, particularly when it comes to the handling of information.

National Security and Foreign Investment

Both Beijing and Washington have increasingly cited national security risks amid the announcement of new restrictions for business. The expanded law on state secrets is expected to further solidify national security concerns, ultimately making the operating environment in China more challenging for foreign businesses. While China's economic growth outlook continues to be a primary factor influencing foreign investment decisions, the revised secrets law is set to add another disincentive for foreign businesses considering operations in China.

Enhanced Legal Guarantee

The revised law, which has been under government discussion for months, aims to provide a strong legal guarantee for better protecting national sovereignty, security, and development interests. Li Zhaozong, director of the Central Security Office and the National Administration for the Protection of State Secrets, emphasized the importance of disclosing information that should be made public while ensuring the necessary confidentiality. The final version of the law, passed by the National People's Congress Standing Committee, is seen as an update for new technology and style changes, offering clarity in some areas and limiting the liability of leadership in certain instances. It also provides compensation for individuals whose rights have been restricted due to secrecy requirements.

Implications for the National People's Congress

The National People's Congress is scheduled to commence its annual meeting next week, during which the country's top leadership will release its economic plans and outlook, as well as outline key policies. This meeting is expected to shed further light on the implications of the revised state secrets law and its potential impact on various sectors.