China's Ministry of Commerce Proposes Rules to Combat Foreign Entities' Trade Secret Misappropriation
nashnova research
China's Commerce Ministry on October 26 released a draft regulation on protecting trade secrets, for the first time linking trade-secret protection directly to national security and giving the ministry explicit legal authority to impose trade and investment restrictions on foreign entities.
What does this draft actually cover?
The Ministry published the draft for public comment on October 26; the comment period closes November 24, 2026.
It targets foreign entities that misappropriate Chinese trade secrets in international trade and related activities.
A key qualifier: not every infringement triggers the rules — only those that simultaneously threaten China's sovereignty, security, or development interests.
This means → the draft layers a national-security filter onto trade-secret protection. The bar is not low, but the consequences are severe once triggered.
What powers does the Ministry gain?
The Ministry can launch investigations into the foreign entities in question.
Available measures include restricting or banning the entity's goods and technology trade with China.
It can also restrict or ban new investment by that entity inside China.
In plain terms = once a foreign company is found to have crossed the line, its trade with and investment in China can both be frozen.
Where does the legal authority come from?
The Ministry says the draft is based on the Foreign Trade Law of the People's Republic of China and related statutes.
Public comments can be submitted to the Ministry's Treaty and Law Department by fax, email, or letter.
This reflects an administrative-regulation path — no National People's Congress legislation required — which could mean a faster timeline to implementation.
What should the market watch?
The draft is the first to tie trade-secret protection directly to sovereignty and national security.
This means → the Ministry now has a new tool — trade and investment restrictions on foreign entities, framed as "protecting trade secrets."
The key variable is the enforcement boundary: what counts as misappropriation, who decides, and what the investigation process looks like remain only partly defined.
In plain terms = the rule grants the power, but the power's boundaries are still blurry — and that is exactly where market uncertainty sits.
市场有风险，内容仅供研究参考，不构成投资建议。