China sharpens economic espionage penalties in ‘tit-for-tat provision’ against US accusations of trade secret theft

China sharpens economic espionage penalties in ‘tit-for-tat provision’ against US accusations of trade secret theft

  • Proposed section of criminal code targets theft of trade secrets by foreign entities, as US cases against Chinese nationals soar
  • Draft of the law, which is out for review until August 16, has flown under the radar until now

China is amending its criminal code to cover trade secrets theft by foreign businesses, a change that could give Beijing a tool to retaliate against the United States for alleged economic espionage.

The proposed new section on economic espionage by foreign firms, which has flown under the radar of many foreign intellectual property lawyers, is part of a wider amendment to the country’s criminal code.

A draft of the law has been released for public review until August 16. If passed, the punishment for stealing Chinese trade secrets to benefit a foreign entity will be much more severe than the current three-year jail sentence for general trade secret theft.

The new clause will target any person or company that “steals, spies, buys, or illegally provides trade secrets to foreign institutions, organisations, and personnel”.