China has introduced sweeping new regulations that classify algorithms, datasets, and computer programs as protected trade secrets, marking a significant expansion of its legal framework for safeguarding technological and artificial intelligence assets.
The updated rules, titled “Trade Secret Protection,” came into effect on Monday and represent the first major revision to China’s trade secret laws since 1998. Under the new provisions, a wide range of technical and business information is now formally protected, including algorithms, software code, production methods, data, and system designs.
Authorities stated that any information that is not publicly known, holds commercial value, and is kept confidential will qualify as a trade secret. Material already disclosed in media reports or public documents is excluded from protection.
The regulation places particular emphasis on digital systems and emerging technologies. It explicitly recognises artificial intelligence-related assets, including machine learning models and datasets, as part of the protected category, reflecting Beijing’s growing focus on technological security and data governance.
Stricter compliance requirements have also been introduced for companies engaged in remote work and international collaboration. These include mandatory access controls, anonymisation of personal data, and detailed audit logs tracking how information is accessed, copied, or modified within organisations.
Enforcement measures are also being strengthened. Individuals or companies found to have disclosed protected trade secrets may be reported to China’s State Administration for Market Regulation. If violations are confirmed, penalties of up to 5 million yuan (approximately €630,000) can be imposed.
The move comes amid a broader tightening of China’s oversight of artificial intelligence development and cross-border technology flows. Earlier reports indicated that authorities have begun restricting the movement of AI talent, while also blocking certain foreign acquisitions involving Chinese tech firms. In parallel, new rules have been introduced to regulate overseas deals involving Chinese investors, data, and sensitive technologies.
Officials have described the regulatory update as part of a wider effort to strengthen enterprise-level protection of intellectual property and reduce exposure to external risks. The government has also launched an annual initiative known as the “Enterprise Trade Secret Protection Capacity Enhancement Service,” during which businesses receive training and risk assessments to improve compliance with the updated rules.
The inclusion of AI systems and digital infrastructure within trade secret law reflects China’s increasing prioritisation of data security and technological sovereignty. It also highlights the growing strategic importance of algorithms and proprietary datasets in global competition.
As enforcement mechanisms tighten, companies operating in China’s technology sector are expected to face higher compliance standards, particularly those engaged in cross-border collaboration or working with advanced AI systems.
