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China Moves to Tighten Data Controls

May 3, 2010

BEIJING — China is on the verge of requiring telecommunications companies and Internet service providers to halt and report leaks of what the government deems to be state secrets, the latest in a series of moves intended to strengthen the government’s control over private communications.

The proposed amendment to the state secrets law, reported Tuesday by the state news media, defines a state secret broadly and loosely as information that, if disclosed, would damage China’s security or interests in political, economic, defense and other realms.

The amendment was submitted Monday to the Standing Committee of the National People’s Congress, China’s legislature, for a third reading, the final step before being signed into law. Few measures reach that point in China without being adopted.

The wording of the amendment, as cited by the state-controlled newspaper China Daily, suggested that Internet and telecommunications companies would have to take a more proactive stance in identifying leaks of state secrets and their sources. The paper said companies must detect, report and delete unauthorized disclosures.

But reports by the state-run news agency Xinhua seemed less definitive about whether the companies must independently scour online transmissions for forbidden information or simply cooperate with the authorities if they suspect transgressions.

According to Xinhua, when companies discover leaks, “information transmissions should be immediately stopped” and the authorities alerted. It did not say how active companies must be in uncovering unauthorized disclosures.

Reports in the state-controlled media did not say what penalties, if any, would be imposed if companies failed to comply.

In a related move, the Chinese government on Monday posted on a government Web site a broad definition of what constituted a commercial secret, covering information related to strategic plans, management, mergers, equity trades, stock market listings, reserves, production, procurement and sales strategy, financing and finances, negotiations, joint venture investments and technology transfers.

Four employees of the British-Australian mining giant Rio Tinto were recently convicted in China of bribery and stealing commercial secrets from a state-owned company. Their prosecution inspired widespread concern in the international business community, partly because of the lack of clarity about what was considered to be a state or commercial secret in China.

Several analysts suggested that the amendment to the state secrets law would have limited impact. Internet service providers and telecommunications companies are already expected to fully cooperate with state security investigations.

In one well-known case, in 2005 a Chinese journalist was sentenced to 10 years in prison for violating the state secrecy law after the authorities obtained information from Yahoo about an e-mail message he sent regarding a confidential government document. Yahoo was later severely criticized in the United States for its role in the case, and one of its founders, Jerry Yang, eventually apologized to the journalist’s family.

“Obviously, it adds another tool that authorities would have to snoop on people,” said Jeremy Goldkorn, publisher of, a Web site about Chinese media and the Internet. “But I don’t think anybody thinks that their communications are safe from the prying eyes of the government, whether it is text messages or any other form of communications.”

Some Chinese legal experts have questioned whether the draft amendment contradicts the government’s pledge to be more open and violates China’s constitutional guarantees of privacy and freedom of communication. But one legal scholar cautioned against judging the amendment before the exact wording was made public.

China’s determination to control cellphone and Internet communications more closely has been increasingly obvious in recent months.


Jonathan Ansfield contributed reporting, and Zhang Jing contributed research.

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