In the aftermath of the conviction of Rio Tinto executives for stealing commercial secrets the government has published guidance on what constitutes a commercial secret and has said that it will pass a law requiring telecoms companies to act if state secrets pass through their networks.
Press reports of the trial and conviction of the four Rio Tinto executives indicate that they were engaged in enquiries that would be considered routine market information gathering anywhere else.
The men were sentenced to between seven and 14 years in prison in a move that has underscored reported worries in the international business community about the lack of clarity on what China considers to be a commercial secret.
The government has published guidelines on what it considers to be a commercial secret in the aftermath of the case, but that guidance may not be of great help to companies.
According to the Wall Street Journal the guidelines say that virtually any information not already disclosed by a company could count as a commercial secret, from technology to merger information to financial data.
The guidance also said that some commercial secrets can count as state secrets.
The government is close to passing a new law on state secrets that will require internet service providers (ISPs) and telecoms companies to identify, block and report the communication of state secrets.
The state-run China Daily newspaper said that the proposed law would force telecoms companies to monitor communications and alert authorities about the communication of information that might be a state secret, as well as putting them under obligation to co-operate with investigations.
"The latest version [of the amendment], in addition to requiring telecom and Internet operators to detect, report and delete information that disclose State secrets, also stipulates the clear obligation for them to work with relevant authorities on investigations," said the paper's report.
"According to the draft, a State secret is defined as information concerning national security and interests that, if released, would harm the country's security and interests," said the report, which also said that the law would apply to domestic and foreign operators in China.
China is known to control its citizens' access to the internet, demanding that service providers block access to material it does not want citizens to see and blocking the material itself if companies do not comply.
Google recently stopped the censorship it had carried out for some years of its Chinese service and the state reportedly began carrying out its own censorship.
Yahoo! suffered international criticism when it handed Chinese authorities information that helped them to identify dissident bloggers, who were then jailed.
