China’s State Secrets Laws


China’sState Secrets Laws

China’sState Secrets Laws

Thestate secrets in China regulation has been deemed effective on itsimplementation on the beginning on March of 2014. This was not thefirst time the state secrets in the republic of China were beingrevised as this process was conducted back in 2010. State secrets arematters that have a bearing on the security of the state and interestof the nation. The levels of state secrets can be divided into threelevels. The top secret levels are disclosures that would lead to veryserious harm. Highly secret refers to disclosures that would lead toserious harm while secrets are disclosure that would just cause harmto the state. The new regulations on the implementation of the statesecrets that was effective in 2014 has not change investors view onChinese transparency and this has consequently not translated toforeign direct investment in China. Though China is one of thefastest growing economies in the world, reporting double digit GDPgrowth over the recent years, businessmen and corporations are stillhesitant about conducting their business in China (Murphyand Xuan, 2013).The government took a bold step in making their political systemtransparent by allowing some information that is deemed to be publicknowledge to be disclosed to the public. However, the government didnot spell out what information should be public.

Severalfirms in the country are torn between siding with either the U.S orChinese governments when handing documents related to U.S listedcompanies in China. Deloitte Touche was caught in a tug of warbetween the U.S and Chinese governments as it eventually refused tohand over its documents to U.S regulators. Nathan Bush, an attorneywith a law firm with offices in Beijing admits that state secret lawsare employed by the Chinese authorities to satisfy some ends. Bushadds that state secrets laws are broad and sometimes the definitionof state secret laws can be ambiguous. This is especially after someprivate firms such as Longtop, a Chinese based software company andChina High Precision a manufacturer of precision machines have beendeemed to have some information that is considered to be state secretlaw (Murphyand Xuan, 2013).

Accordingto the Journal of Technology and Intellectual Property authored byBai and Da, the Chinese government uses its secret state laws andtrade secrets to protect business owners and traders in the country.In addition to the legal framework in the country, litigation onChinese laws is pretty difficult due to protection by the state andthe Chinese laws especially when the litigation involves a foreigncompany. The trade measures seek to protect the Chinese by enactingsome preventive measures. For example, in 2009 China experienced a25.5% increase in the number of intellectual property cases filled incourts when compared to the previous year. In this year, 30,626intellectual property cases were filled and this automatically madeChina the leading litigious country in the world. Only a few of thesecases that went to court lead to serious conviction. The Chinesesecret state laws and its trade secret disputes have been used toprotect the Chinese population especially due to the fact that tradesecrets are not known to the public and therefore its becomesdifficult for the plaintiff to use any information against Chinesecompanies because the information is not in public domain (Bai,&amp Da, 2011).


Bai,B. J., &amp Da, G. (2011). Strategies for Trade Secrets Protectionin China. NorthwesternJournal of Technology and Intellectual Property,351-376.

Murphy,M and Xuan, S. (2013). Developmentsin the protection of trade secrets in China.Available at