Draft regulations lay groundwork for sanctions against foreign entities

The flags of China and the United States. [AFP]
The flags of China and the United States. [AFP]

China is moving to establish regulations that would allow it to restrict the imports, exports, investment and entry of foreign companies or individuals found to have infringed on Chinese trade secrets. The move comes amid growing tensions with the United States, which has recently imposed sanctions on Chinese firms over alleged trade secret theft.

China's Ministry of Commerce published a draft of its "Special Regulations on the Protection of Chinese Trade Secrets" on its website Monday and began soliciting public comment.

The draft, comprising 10 articles, would allow the government to take countermeasures when foreign companies, organizations or individuals infringe on Chinese trade secrets through trade activities and harm or pose a substantial threat to China's sovereignty, security or development interests.

Specific sanctions outlined in the draft include restrictions or outright bans on the import and export of goods and technology related to China, restrictions or bans on investment in China, restrictions or bans on entry into China, and the imposition of fines.

The draft also grants investigative authority to the Commerce Ministry. When a foreign company or individual is suspected of infringing on trade secrets, the ministry may investigate whether the conduct threatened China's sovereignty, security or development interests. If the subject of an investigation refuses to cooperate, the ministry may issue a ruling on its own.

The move comes as China and the United States are at odds over trade secret theft.

Earlier, the Department of State on Monday imposed sanctions on five Chinese companies it said were involved in the theft of trade secrets related to Google's AI technology.

In response, China's Commerce Ministry rebuffed the allegations, saying the growth of Chinese AI companies was the result of years of focus on basic research and sustained investment in innovation, and had nothing to do with trade secret theft.

It also called on the United States to stop smearing and pressuring Chinese companies.


woo@heraldcorp.com