Introduction

The State Administration for Market Regulation (SAMR) issued new Trade Secret Protection Rules  (商业秘密保护规定) (Order No. 126) (the “Rules”) on February 24, 2026, with an effective date of June 1, 2026.  The Rules replace the Several Provisions on Prohibiting Infringement of Trade Secrets promulgated by the predecessor to SAMR, the former State Administration for Industry and Commerce (SAIC) (关于禁止侵犯商业秘密行为的若干规定,Order No. 41) on November 23, 1995 and subsequently amended in 1998 (Order No. 86). The efforts to revise the original trade secret rules began at least 10 years ago, as reported in this blog.

Most importantly, many recent commentaries have described the new instrument as a set of ‘regulations”.  Regulations are issued by the State Council and have binding legal effect on the courts and agencies of the government.  This document is instead a departmental rule (部门规章). It governs SAMR’s administrative enforcement of trade secrets.  The Rules function as an administrative enforcement implementation measure operating within the framework established by the Anti‑Unfair Competition Law (AUCL), as last amended in 2019.  As an enforcement measure, it cannot expand the scope of the AUCL, especially in the context of civil or criminal litigation.  Moreover, as I have noted elsewhere in this blog, the administrative enforcement system for trade secrets has been rarely used by Chinese and foreign rightsholders alike. This phenomenon is not unique to administrative enforcement as civil enforcement of trade secrets in China has also been historically rare.

China’s legislative hierarchy established by the Law on Legislation ranks departmental rules below statutes and State Council administrative regulations.  They may also be inferior to provincial and autonomous region legislation.

Instrument                                                      | Issuing Body
Laws (法律)                                                     | National People’s Congress
Administrative re gulations (行政法规)     | State Council
Department rules (部门规章)                       | Ministries and agencies

The 1995 and 1998 SAIC rules also fall into the lowest of these categories.

Substantive trade secret protections in China are found primarily in the Anti-Unfair Competition Law (AUCL), the Civil Procedure Law, judicial interpretations issued by the Supreme People’s Court, and the relevant provisions of the Criminal Law of the People’s Republic of China.  The Rules operate mainly in the administrative enforcement layer, providing procedural rules and investigative tools for market-regulation authorities of SAMR.

Second, the Rules replace the seriously outdated SAIC adopted over 30 years ago.   Trade secret legislation in China has often lagged other areas of intellectual property law, with long periods of limited legislative movement followed by relatively concentrated bursts of reform. The patent, trademark, copyright laws and regulations have all undergone revisions since the 1990s, including at WTO accession. The drafting of the Rules took at least five years, as detailed in this blog.  While political pressure placed on China to reform its trade secret regime particularly during the first Trump administration helps explain the legislative changes, the delays in enacting these Rules do not appear to have similar political origins.  Rather, these drafting delays might instead also be understood as the latest step in a longer evolution of China’s trade secret regime.  The 1995 SAIC rules were drafted in an environment that was largely oriented toward: market management, maintaining commercial order and resolving disputes involving domestic market actors, including actions by employees leaving with trade secrets for a competitor.   It was not designed to address the increasingly complex trade secret disputes that arise in modern technology sectors.  Perhaps the most significant factor in this changing approach has been China’s own growing need to address risks of employee misappropriation, digital misappropriation, and the protection of confidential information in modern technology industries. 

As one example, trade secrets are an important comparison point for pharmaceutical intellectual property. In the pharmaceutical sector, protected know-how may include manufacturing processes, biologics production methods, formulation details, cell-culture techniques, scale-up knowledge, and quality control procedures that may never appear in a patent. Trade secret protection therefore complements other forms of pharmaceutical IP.  The removal of the “practical utility” requirement from AUCL in 2017 was critical to protecting experimental failures under China’s trade secret law.  The issue had been raised in the bilateral US-China innovation dialogue, but it was apparently never reflected in high level commercial and trade dialogues.  This additional requirement on trade secret protection, which predated China’s WTO accession, was also an overlooked TRIPS compliance issue.  The removal of the requirement facilitates protection of pharmaceutical research processes where experimental failures are often expensive but necessary conditions to an experimental success, particularly for disruptive or break-through innovations. Indeed, the Chinese government has begun to generally call on its research institutes to “be brave enough to tolerate failure.”

Another notable change from the 1995 SAIC rules is the removal of language recognizing only the rights of  citizens (公民) to bring trade secret enforcement cases, and not natural persons or foreigners.  This formulation raised potential national treatment concerns under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which China accepted when it joined the World Trade Organization in 2001.  It was the subject of an inquiry raised by the United States delegation at the WTO. See WTO, IP/C/W/374, Sept. 10, 2002, Review of Legislation and Enforcement, p. 44.   The Rules correct this obvious issue and refer instead to trade secret owners, licensees, and authorized users.  This long overdue change aligns the Rules with the broadened language introduced in the 2017 revision and 2019 amendments to the AUCL.

In sum, the evolution of China’s administrative trade secret protection regime reflects the interaction of at least three forces. The most important influence was domestic legislative reform, including the 2017 and 2019 revisions to the AUCL.  The AUCL modernized the statutory framework by expanding prohibited acts and introducing burden shifting in civil litigation. Second, international engagement and U.S.-China bilateral pressure through the WTO, S&ED, JCCT, and the 2020 Phase One Agreement encouraged improvements in enforcement and protection of confidential information. Third, China’s own technological and economic development has created new enforcement demands, particularly relating to employee mobility, digital misappropriation, and insider risk. The Rules reflect the intersection of these forces.

Timeline: Evolution of China’s Trade Secret Protection Framework

Here is a condensed snapshot of significant developments in this area:

1993 — Anti‑Unfair Competition Law (AUCL) adopted. China’s first modern trade secret statute.

1995 — SAIC Trade Secret rules issued to implement administrative enforcement.

2002 — WTO/TRIPS review discussions raise issues including the ‘citizen’ wording in the 1995 rules.

2012–2016 — S&ED and JCCT dialogues emphasize trade secret protection and enforcement.

2013 — Eli Lilly v. Huang Mengwei, Shanghai Intermediate People’s Court, is the first preliminary injunction civil trade secret case in China.

2017 — Comprehensive revision of the AUCL.

2019 — AUCL amendment expands prohibited acts and introduces burden shifting in civil litigation.

2020 — U.S.–China Phase One Agreement includes several trade secret provisions.

2026 — SAMR issues new Trade Secret Protection Rules replacing the 1995 SAIC rules.

Comparison of the 1995 SAIC Rules and the 2026 SAMR Rules

The following chart outlines some of the differences between the 1995 SAIC Rules and the Rules, including their original basis in Chinese law and the multilateral or bilateral context (if any) for the approach taken by China.  The chart identifies a continuing interest by SAMR in relying on rules rather than regulations to guide enforcement of trade secrets.  It also underscores an increased interest by SAMR in protecting technological trade secrets, rather than broadly addressing unfair competitive act in the market.   To better support technology diffusion in China, the Rules also legalize certain forms of reverse engineering. The Rules also set down exemplars of what constitutes “reasonable measures” to protect trade secrets in lieu of  a US law approach that relies upon case law clarifying what constitutes such  “reasonable measures”.  As is true of other general common law concepts imported into Chinese law, China continues to rely upon a defined set of steps and procedures which in trade secrets includes access controls and confidentiality agreements. Choice-of-law issues concerning the extraterritorial application of U.S. standards of what constitutes “reasonable measures” have also appeared in US cases.  If, for example, the misappropriation of a U.S. trade secret occurs in China but is  litigated in a Section 337 investigation in the U.S., the U.S. International Trade Commission is likely to apply US standards of what constitutes a U.S. trade secret.  As another example of China’s own adaptation of U.S. concepts, although the Phase One Agreement called for China to establish a system of reversals of burdens of proof due to a general lack of discovery in Chinese civil procedure, the actual implementation of this rule appears to have been spotty.  The Rules do not have measures that introduce a general burden of proof reversal process, perhaps because this provision in the AUCL has been criticized by Chinese academics and others who have noted that the United States lacks such a provision.  In addition, SAMR also has authority to seize evidence in the course of its enforcement investigations.

One significant challenge across civil, criminal or administrative enforcement, has been the limited transparency of trade secret enforcement data in China, which has made it difficult to evaluate whether legal reforms have translated into practical enforcement improvements.  Available data also suggests that transparency in trade secret enforcement declined during the trade war period, making it more difficult to evaluate whether increased political pressure on trade secrets also translated into stronger enforcement outcomes. 

The chart below also underscores how the US appears to have been more willing to pursue unilateral measures against China to secure better enforcement involving trade secrets.  The preference for unilateral measures, when trade secrets remained am underutilized subject of WTO dispute settlement, was in my view often an unhelpful approach.  TRIPS Article 39 of the TRIPs agreement concerning undisclosed information as well as related implementing provisions, should have been the subject of a WTO “test case” before the WTO had been dismissed by the U.S. as a useless institution.

Conclusion

The Rules are an important update to China’s trade secret protection system. While certain elements align with issues raised in bilateral discussions and the Phase One Agreement, many features reflect domestic legal evolution and the growing importance of protecting confidential information in China’s own innovation economy. The Rules illustrate both the influence and the limits of international pressure in shaping China’s intellectual property framework.   The Rules also illustrate the continuing importance of administrative law in the evolution of China’s intellectual property system. While many international discussions have focused on statutory reform, the day-to-day operation of IP protection in China often depends on administrative rules, their investigative practices, and the institutional capacity of enforcement agencies. The Rules are a long-awaited modernization of the administrative trade secret enforcement mechanisms which will hopefully further help in attracting foreign rights holders to the long overlooked trade secret administrative enforcement mechanism.