BEIJING, CHINA – China has passed new rules that will broaden the scope of what can be classified as a state secret, raising concerns about transparency and potential liabilities. The updated state secrets law, set to take effect on May 1, includes a provision that extends precautions for state secrets to also cover unclassified information known as work secrets. The definition of work secrets encompasses information that could have an “adverse impact” if leaked. However, critics argue that the definition is vague and open to abuse, potentially limiting the public’s right to information.
Jeremy Daum, a senior fellow at Yale Law School’s Paul Tsai China Center, expressed concerns over the new rules. He stated that the inclusion of work secrets could lead to excessive identification of information as secret, hindering public knowledge and exposing individuals to potential liability. Daum also highlighted the lack of clarity in China’s approach to state secrets, noting that seemingly benign situations have been stretched to encompass secret information in the past.
China has often been criticized for its lack of transparency relative to many developed countries, with high-level officials occasionally disappearing from public view without explanation. The new state secrets law adds to a growing perception among the foreign business community that China’s emphasis on national security has made the operating environment more challenging. Gabriel Wildau, managing director at consulting firm Teneo, commented on the impact of the law, stating that while China’s economic growth outlook remains a crucial factor for foreign investment decisions, the secrets law adds another disincentive.
The new rules also retained restrictions on overseas travel for individuals working with state secrets. While the revisions to the law have been described as updates for new technology and style changes, critics maintain that the lack of clarity and broad interpretation of state secrets pose risks for businesses operating in China. The concerns raised by the updated state secrets law are occurring as Beijing and Washington increasingly use national security as a rationale for implementing new restrictions on business activities.
The passage of the amended state secrets law by China’s National People’s Congress Standing Committee comes ahead of the annual meeting where the country’s top leadership will unveil economic plans and policies. The new law is seen as providing additional legal assurance for protecting national sovereignty, security, and development interests. However, the broad definition of work secrets and the lack of clarity in implementation remain concerns for businesses and individuals seeking transparency in China’s operating environment.