The Law on Guarding State Secrets (“State Secrets Law”), originally enacted in 1988 and first revised in 2010, was revised for a second time by the Standing Committee of the National People’s Congress (“NPC”) on February 27, 2024 effective May 1, 2024. Although most laws undergo a third reading before finalization, this revision was approved after only two readings.
The timing of the approval is somewhat curious as it happened within two weeks of the annual meeting of the full NPC, but revision of the Law falls within the Standing Committee’s scope of authority under the Law on Legislation.
The revised State Secrets Law inherits the original definition of “state secrets” which encompass a broad range of topics from national defense and foreign relations to finance and infrastructure. The continuity of ambiguity allows the government discretion in prosecution and enforcement, creating compliance challenges for businesses operating within China.
Many of the revisions are formalistic in nature but others are very significant:
Revised Articles 3 and 4 expressly state that state secrets protection work falls under the leadership of the Party, further eroding the distinction in law between the Party and the State. In particular, the Central Protection of State Secrets Leading Group, a Party entity under the direct authority of the Party Central Committee which in practice means the Standing Committee of the Party Politburo, is in charge of determining what constitutes a state secret, the obligations to protect state secrets, and under what circumstances and by whom a state secret may be disclosed.
Revised Article 5 expressly provides that the obligation to protect state secrets is society-wide, encompassing all state organs and military forces, all Party organizations, all people’s organizations, all business entities, all social organizations, and all citizens. No exceptions apply, e.g., with respect to expression of dissent or protest against particular policies.
Revised Article 8 (formerly Article 7) provides that all organizations and other entities must establish a structure or designated individuals to be responsible for the protection of state secrets, without regard to its ownership structure (i.e., State-owned, privately-owned or foreign-invested) or whether it is likely to have access to state secrets. This would seem likely to create another layer of authority to monitor expression.
New Article 9 would create a statutory basis for educating and indoctrinating the populace on the need and obligation to protect state secrets.
New Article 10 authorizes investment in science and technology to better protect state secrets.
New Article 11 calls upon governments at and above the county level to include the protection of state secrets in their economic and social development plans with sufficient allocation of budgetary funds, in apparent disregard of the financial straits in which many subcentral governments find themselves.
Revised Article 12 calls upon the state to increase investment in the training and reward of state secrets protection personnel.
Notably, revised Article 17 would allow upper-level authorities to delegate responsibility to lower-level organizations and entities to determine what constitutes a state secret under special circumstances, e.g., when time does not allow for higher-level authorities to make the determination. This provision is particularly problematic because it creates uncertainty over whether any particular item of information may constitute a state secret, putting at risk potentially anyone or any organization or entity who publishes or transfers any information or item. The resulting uncertainty will increase self-censorship, including complicating the ability of subsidiaries of foreign companies to determine whether or not any particular item of information may constitute a state secret and therefore whether or not it may be disclosed.
Article 21 (formerly Article 16) establishes a procedure for adding personnel to the list of those with access to state secrets.
Article 24 requires that all organizations and entities conduct an annual state secrets designation review.
Article 28 prohibits the unauthorized disclosure and transfer of state secrets, as well as the catch-all violation of state secrets designation.
Perhaps most importantly, Article 64 provides that “work secrets”, which are not state secrets but the disclosure of which would have a certain negative impact, are also to be protected by security measures. Such security measures would remain to be addressed in separate regulations. However, what constitutes “work secrets” under this Law is not clear and is vulnerable to being subject to arbitrary, inconsistent or expansive interpretation. Note that the unauthorized disclosure of something which constitutes a work secret needs not reach the level of harm to national security to warrant protection but needs only to have an adverse impact, presumably to state secrets. Work secrets could presumably include information obtained through conventional research and due diligence when the corporate intelligence sector is already under scrutiny due to last year’s several high-profile raids on international consulting and due diligence firms and detentions of their staff. The inclusion of this term in the State Secrets Law, almost as an add-on, may lead to self-censorship and impair ordinary business operations.
A number of articles are revised to tighten procedures for the protection of, and restrict the disclosure of, state secrets, including new Article 60 which provides sanctions for violation of state secrets protection provisions. Article 46 provides that persons with access to classified information are now required to obtain approval before traveling overseas, and this restriction can be extended even after they leave their position or retire. Such restrictions on retired senior Partys officials are actually longstanding.
