China Tightens Grip On National Security: State Laws Expanded To Encompass 'Work Secrets'

China has expanded its state secrets law to encompass a broader category of “work secrets,” a development that could have far-reaching implications for businesses operating in the country.

What Happened: On Tuesday, Chinese President Xi Jinping signed off on the revisions to the “Guarding State Secrets” law, as reported by CNBC. The updated law, which was approved by legislators on the same day, will come into effect on May 1.

Under the new rules, the protection of state secrets will also extend to unclassified information termed as work secrets. This category includes information that could have an “adverse impact” if leaked. The law, however, does not specify the exact measures to be taken for such information.

See Also: Nvidia Is Still ‘Stepping On The AI Accelerator’: 7 Analysts Size Up Q4 Results, Supply And Demand Dynamics

The inclusion of work secrets is seen as the most contentious aspect of the new law. Jeremy Daum, a senior fellow at Yale Law School’s Paul Tsai China Center, expressed concerns that this could lead to overzealous identification of matters as work secrets, limiting public access to information and exposing individuals to potential legal liabilities.

"For foreign businesses, it's the lack of clarity that will remain an unquantified risk to doing business in China," Daum said.

China’s transparency has long been a topic of debate, with the country often being criticized for its opacity in comparison to developed nations. The new law, along with previous laws on espionage and foreign policy, adds to the uncertainty faced by foreign businesses operating in China.

Why It Matters: The expansion of China’s state secrets law comes in the wake of a Chinese national, who is also a U.S. citizen, being arrested for stealing missile-tracking secrets from a defense contractor. This incident has raised concerns about the potential misuse of sensitive information.

The U.S. recently announced plans to invest billions in replacing Chinese-made cranes at its ports, citing national security concerns. This move by China could further complicate the operating environment for foreign businesses in the country.

China’s focus on national security has also been evident in its security assistance to Pacific Island nations, a move that has drawn warnings from the U.S. over potential regional tensions. The expansion of China’s state secrets law could further exacerbate these tensions and impact the strategic landscape in the Asia-Pacific region.

Read Next: How A Chance Encounter With Alibaba Founder Jack Ma Made This 77-Year-Old Wall Street Titan Pledge $500M

Image Via Shutterstock