China trade secrets law: Beijing drafts six measures against foreign firms

WEDNESDAY, 28 OCTOBER 2026

On 26 October China's Ministry of Commerce opened consultation on a ten-article draft: trade and investment restrictions for those who steal Chinese trade secrets. Comments until 24 November.

China trade secrets law: on 26 October 2026 China's Ministry of Commerce opened consultation on a draft that would allow it to hit foreign companies accused of stealing Chinese trade secrets with restrictions on imports, exports and investment. Comments can be submitted until 24 November; the text would take effect on the day the final version is published.

What the 26 October draft provides

The document is called "Special Provisions on Protecting Chinese Trade Secrets" and it is short: ten articles. It is based on China's Foreign Trade Law and has a stated aim, to protect China's sovereignty, security and development interests together with the rights of Chinese trade secret holders.

The key point is the threshold. A commercial dispute is not enough: the measures apply only if a foreign entity, in the course of international business, infringes Chinese trade secrets and at the same time harms or poses a real threat to China's national interests. By "foreign entity" the draft means companies, other organisations and individuals.

The Ministry of Commerce decides, and it can open an investigation. If the foreign company does not cooperate, the ministry can decide on the basis of the facts already gathered; companies and individuals can file reports. Decisions are made public.

The six measures and the draft's numbers

The core of the text is Article 5, which lists the measures that can be applied, alone or combined: restricting or banning the foreign company's China-related trade in goods, technology and services and banning exports to it; restricting or banning new investment in China; restricting the entry of its staff and means of transport; restricting or revoking work and residence permits; fines; other necessary measures.

• Draft published: 26 October 2026, by China's Ministry of Commerce.
• Public consultation deadline: 24 November 2026.
• Articles in the text: 10, one of which (Article 5) lists 6 types of measures.
• Planned entry into force: from the day the final text is published, with no transition period.
• Ordinary rules already in force: the trade secret provisions of China's market regulator, released on 24 February 2026 and applied since 1 June 2026.

The measures are not necessarily permanent. A targeted company that stops the infringement, removes the risk and compensates the damage can apply to have them changed or lifted. Chinese companies that need to keep dealing with a targeted entity must instead apply to the ministry for approval.

Why it comes now

The draft follows a US decision by one week. On 19 October the US State Department sanctioned five Chinese entities under the Protecting American Intellectual Property Act, linking them to the theft of trade secrets from a US company. The next day China's Ministry of Commerce rejected the accusations and warned that, if the decision is not corrected, it will take the necessary measures in response.

The 26 October text does not name the United States or any other country, and it applies to any foreign entity. The link between the two dates is a reading of the context, not something the draft states: in practice China is equipping itself with a tool following a logic similar to the American one, entrusted to the Ministry of Commerce.

China trade secrets law: what it means for importers

For the great majority of European companies buying finished products in China the draft changes nothing for now: the national security threshold makes it a tool designed for serious and politically relevant cases, not for ordinary disputes between buyer and supplier.

The text does, however, point to a context in which it is worth looking more closely at three situations. The first is joint development: when a product is born in the factory, with drawings, moulds and process parameters worked out together with the supplier, the question "who owns this know-how?" is no longer only a contractual one. The second is moving production out of China to other countries, taking tooling and technical documentation along. The third concerns the supply chain: if a foreign company becomes subject to these measures, Chinese suppliers can no longer sell to it without approval, and anyone depending on that link risks delays.

None of these cases is mentioned in the draft. It is the kind of activity where documenting who owns the information costs little before and a lot after.

What to do before 24 November

The text may change after the consultation, so there is no need to rewrite contracts in a hurry. It is the right time, however, to take stock: which drawings, specifications and moulds are yours and paid for by you, which belong to the supplier, and where this is written down. A contract stating who owns the tooling and how technical data may be used protects both sides.

With La Merce, companies developing a custom product with a Chinese factory reach the final text, expected after 24 November, with ownership of moulds and drawings already written into the order and checked at the factory.

Let's talk about your productprojectconceptgoalbrandproductprojectconceptgoalbrandproductprojectconceptgoalbrandproduct