Release date
Algorithms and computer programs are currently considered trade secrets by the Chinese government.
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The new regulation, called “Trade Secret Protection,” went into effect on Monday. According to the regulations, any “information relating to technology, such as structures, raw materials, formulations, materials, samples, patterns, processes, methods, data, algorithms, computer programs, codes, etc.” is considered a trade secret.
Confidential technical and business information that is “not publicly known and has commercial value” is also subject to regulation.
Anything that has already been described in the media or in public reports is not considered a trade secret.
The regulations set out strict measures for remote work and cross-border collaboration, including access controls, anonymization of data to hide personally identifiable information, and detailed logging of who accessed, copied, or modified data.
Individuals and companies can report whether their trade secrets have been compromised, and if an investigation by China’s State Administration for Market Regulation (SAMR) confirms it, they could be fined up to 5 million yuan (630,000 euros).
The regulation is China’s latest move to protect AI secrecy. Earlier this month, Bloomberg reported that the government was restricting the movement of AI talent, and in May, the Chinese government blocked Meta’s acquisition of Chinese-based Manas, one of the country’s top AI companies.
China also announced sweeping new rules this week to tighten overseas transactions involving Chinese investors, technology, data and national security.
The new regulations are the first update to China’s trade secrets rules since 1998, and explicitly mention AI and data as subject to the law.
The Chinese state is conducting what it calls the “Corporate Trade Secret Protection Capacity Enhancement Service” in June, as it has done every year since 2023.
Within this month, we will hold operational training to “create awareness” and conduct risk assessments based on the new regulations.
