Protecting Know-How in China: New Trade Secret Rules for Technology Partnerships

China’s new Provisions on the Protection of Trade Secrets, issued by the State Administration for Market Regulation, took effect on 1 June 2026. They replace rules introduced in 1995 and last revised in 1998, updating the dedicated administrative framework after nearly three decades. 

For foreign investors, notable provisions address unsuccessful research, safeguards for cross-border collaboration, and the boundary between protected information and employees’ transferable skills. The rules also clarify administrative enforcement procedures. These developments provide a clearer foundation for businesses to protect their know-how and build technology partnerships in China. 

1. Protecting the Value of Unsuccessful Research
Article 7 expressly recognises that interim results, failed experimental data and technical solutions can have commercial value. Protection still depends on satisfying the other trade secret requirements, including secrecy and appropriate confidentiality measures. 

For foreign investors, this matters well before a project produces a marketable product or patentable invention. In pharmaceutical development, chemicals and advanced materials, knowing which approaches do not work can save substantial time and expenditure. An unsuccessful experiment may therefore represent a valuable project asset.

Investors should consider including such information in their confidential asset inventories. Research records should identify when results were generated, who contributed and why the findings matter commercially. 
Joint development agreements should also address ownership, permitted use and retention of intermediate findings.

Partners should decide whether unsuccessful research may be reused in later projects and what happens to laboratory records when cooperation ends. Addressing these questions early can reduce uncertainty over the value each party brings to and takes away from the collaboration.

2. Making Global Confidentiality Policies Work Locally
Article 9 identifies tiered access permissions, data masking and activity logs as confidentiality measures relevant to remote working and cross-border collaboration. It also recognises contractual, organisational and physical safeguards. 

For multinational businesses, the practical priority is to translate global policies into controls that Chinese teams and external partners can understand and follow. A group-wide confidentiality policy should be supported by documented implementation across shared repositories, cloud platforms and laboratories.

Before opening access to technical information, investors should define which entity and individuals may use it, for what purpose and for how long. Permissions should reflect project responsibilities, with periodic reviews when employees change roles or suppliers engage subcontractors. Local training should explain how these requirements apply to everyday activities, including downloading files and sharing experimental results.

Businesses should also preserve evidence that safeguards operated in practice. Training records, access approvals and system logs can help reconstruct events if information is misused. Project closure procedures should cover access revocation, return or deletion of materials, and continuing confidentiality obligations. These arrangements can support collaboration while maintaining visibility over sensitive information.

3. Supporting Talent Mobility Within Clear Boundaries
Article 15 generally excludes independent development, qualifying reverse engineering, and former employees’ use of general knowledge, skills and industry experience from infringement. 

This distinction is useful for foreign investors recruiting experienced engineers and scientists in China. Recruitment and onboarding procedures should make clear that new employees must not bring or use confidential materials belonging to previous employers. Managers should avoid requesting documents or technical details that candidates are not authorised to disclose.

For sensitive projects, investors should consider documenting the sources of technical inputs and maintaining development histories. Similar checks can be built into arrangements with research partners. These practices help demonstrate independent work and allow businesses to benefit from professional expertise within clearer boundaries.

Conclusion
The new provisions are a welcome development for foreign investors pursuing technology partnerships in China. They provide more specific guidance that businesses can translate into practical protection throughout a project’s lifecycle. By combining clear agreements, effective confidentiality measures and well-maintained records, investors can better preserve the value of their know-how and collaborate with greater confidence.