Stealing trade secrets is a crime in China, and the punishment can be severe: under Article 219 of the Criminal Law you face up to three years’ imprisonment and a fine for an ordinary case, and three to ten years where the circumstances are particularly serious – and since the 2021 amendment, losses or illegal gains of RMB 300,000 or more can already put you in criminal territory.

What conduct counts as trade secret theft?

Article 219, as revised by the Criminal Law Amendment (XI) effective March 1, 2021, covers several routes: obtaining a trade secret by theft, spying, bribery, fraud or electronic intrusion; disclosing, using, or letting others use it without the holder’s consent; and breaching a confidentiality obligation – the classic case of an employee or business partner who takes a secret learned under an NDA to a competitor. Someone who knowingly receives, discloses or uses another person’s stolen secret can also be liable. The amendment also removed the Criminal Law’s own definition of trade secrets, so China now applies the Anti-Unfair Competition Law standard: technical or business information that is not publicly known, has commercial value, and is protected by reasonable confidentiality measures.

What if the secret goes to an overseas party?

A separate article added in 2021, Article 219-1, makes it a distinct crime to steal, spy out, buy or illegally provide trade secrets to overseas institutions, organizations or individuals. The basic penalty is up to five years’ imprisonment and a fine, and more than five years where circumstances are serious. For cross-border businesses the message is clear: passing a Chinese company’s secret to an overseas buyer or competitor is not just ordinary infringement – it is a heavier, separately charged offense.

Practical risk points

For employers: a trade secret only exists if you can show reasonable confidentiality measures – signed NDAs, access controls, marked documents. Without them, even a disloyal ex-employee may escape criminal liability. For employees and executives: personal exposure is real. The company’s civil claim and the criminal case can run in parallel, and a conviction means a criminal record that can affect work permits, travel and future employment. A non-compete clause does not replace a confidentiality duty, and signing an NDA does not protect you if you actively steal.

Example

Hypothetical: a product manager at an electronics company in Shenzhen copies the source files of the company’s core algorithm a week before joining a rival, and the rival soon ships a near-identical product. An audit traces the leak, the company files a criminal complaint, and the assessed loss is above RMB 300,000. The case proceeds under Article 219, and both the manager and the rival executive who knowingly used the files face investigation – exactly the pattern Chinese prosecutors pursue.

The bottom line: treat another company’s technical and business data as off-limits even when it is easy to copy, and if your own secrets are taken, act fast – evidence of confidentiality measures and of the value of the loss decides whether the police will take the case.

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Frequently asked questions

Q: What conduct counts as trade secret theft?

A: Article 219, as revised by the Criminal Law Amendment (XI) effective March 1, 2021, covers several routes: obtaining a trade secret by theft, spying, bribery, fraud or electronic intrusion; disclosing, using, or letting others use it without the holder’s consent; and breaching a confidentiality obligation – the classic case of an employee or business partner who takes a secret learned under an NDA to a competitor.

Q: What if the secret goes to an overseas party?

A: A separate article added in 2021, Article 219-1, makes it a distinct crime to steal, spy out, buy or illegally provide trade secrets to overseas institutions, organizations or individuals. The basic penalty is up to five years’ imprisonment and a fine, and more than five years where circumstances are serious.

Wang Guan | Co-founder, Beijing Haolue Law Firm | +86 17813108512