Yes. China’s Counter-Espionage Law, revised on 26 April 2023 and in force since 1 July 2023, applies to foreign companies, organisations and individuals who act in China, and its definition of espionage is deliberately broad.

What counts as espionage

Article 4 lists six categories. In plain English: working with or for a spy organisation; joining one or accepting its tasks; and, most relevant for business, a foreign organisation or individual that steals, probes for, buys or illegally supplies state secrets or intelligence “as well as other documents, data, materials and objects related to national security and interests.” The same article covers cyber attacks, intrusions and sabotage aimed at state organs, secret-involved units or critical information infrastructure, and reaches agents who use Chinese citizens or entities to spy on third countries in a way that harms China.

The penalties

Article 53 sends espionage that is a crime to the Criminal Law. Article 110 makes joining a spy organisation, accepting its tasks or directing enemy attacks punishable by ten years to life, or three to ten years in lighter cases. Article 111 covers obtaining or supplying state secrets or intelligence for a foreign entity: five to ten years, ten years to life if especially serious, and up to five years if minor. Conduct that is not a crime can still bring a warning or up to 15 days of administrative detention, plus fines of up to RMB 50,000 for an individual and RMB 500,000 for a company under Article 54. Article 66 lets foreign nationals be ordered to leave within a time limit, removed, or expelled with a ten-year re-entry ban.

What this means in practice

Watch the phrase “documents, data, materials and objects” — it is not limited to papers stamped “state secret.” Before your team collects or forwards anything from a government or state-owned source, ask who owns it and where it goes. Article 8 obliges organisations to assist counter-espionage work and guard secrets, and Article 56 lets authorities order a business to fix security failures, summon its leaders for talks and issue warnings. Article 55 offers leniency for voluntary, truthful reporting, including by people coerced abroad.

A short illustration (hypothetical)

Say a foreign consultancy’s Shanghai office maps provincial grid vulnerabilities and port customs data for an overseas client, using internal circulars from a contact. Even unmarked material can fall within Article 4(3), exposing staff to Article 111 and the office to a unit fine under Article 54.

In short: assume the Counter-Espionage Law reaches your China operations, and manage data as if it does.

Common questions

Q: Does the law only apply to spies?

A: No. Article 4(3) reaches ordinary foreign organisations and individuals who obtain or pass on certain national-security-related documents, data, materials or objects.

Q: Can a foreign national be removed from China?

A: Yes. Article 66 allows an order to leave within a time limit, removal if the person fails to go, or expulsion with a ten-year re-entry ban.

Q: Can a Chinese employee also be liable?

A: Yes. Article 54 covers people who knowingly support, assist or shield espionage conduct, and Criminal Law Articles 110 and 111 apply to anyone.

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