CHINA'S ANTI-ESPIONAGE LAW

1. Context 

• On April 26, 2023, China's legislature approved sweeping amendments to China's anti-espionage law, broadening the scope of what may be defined as activities related to spying and national security.
• The amendments come amid a string of high-profile cases involving journalists, foreign executives, as well as international companies in China, who have come under the lens of authorities on national security grounds.
• The expanded law follows the Xi Jinping government's increasing focus on Security and a recent policy shift that now emphasises the dual importance of development and security, rather than a focus solely on economic development.

2. About China's anti-espionage law

• Article 1 of the law says the idea behind the legislation is "to prevent, stop and punish espionage conduct and maintain national security".
• The broad ambit of what constitutes national security as well as the law's focus on involving a whole-of-society approach to counter-espionage, including from Chinese enterprises and organisations, evoked concerns among both rights groups and foreign enterprises in China.
• Foreign governments are especially concerned whether Chinese companies, particularly in the tech sector would be mandated to offer their vast amounts of data to the authorities.
• For instance, one article of the law mandates that "all state organs, armed forces, political parties and public groups and all enterprises and organisations, must prevent and stop espionage activities and maintain national security.
• Another article encourages ordinary citizens to take part in national anti-espionage efforts by reporting to the authorities any activity deemed to be suspicious and endangering national security.
• The latest amendments are the first changes since 2014 and will take effect on July 1, 2023.
• They have further broadened the law's scope, with one of the changes declaring that "all documents, data, materials and items related to national security and interests will be protected on par with what is deemed state secrets.
• The definition of espionage has also been expanded to include cyber-attacks.
• Essentially the transfer of any information deemed by authorities to be in the interest of what they define to be national security will now be considered an act of espionage.

3. The prompted changes

• The latest change "improves the regulations on cyber espionage and clearly defines cyberattacks, intrusions, interference, control and destruction as espionage.
• Other changes, would include clarifying the responsibility of national security organs in guiding and arranging publicity as well as provisions to strengthen the protection of personal information in counter-espionage work.
• The amendments have also coincided with several recent high-profile cases which observers have seen to reflect a broadening scope for anti-espionage activities as well as a widening definition of national security. The cases of three journalists were arrested on the charges of spying

4. The impact of the amended law

• The amended law is likely to have a chilling impact both within China and beyond.
• Chinese journalists, academics and executives who frequently engage with foreign counterparts are likely to think twice before doing so, at least without explicit government sanction, particularly in the wake of the arrest of Dong Yuyu.
• Unrestricted engagement between Chinese and foreign scholars, which has already become limited in the Xi Jinping era is likely to become even rarer.
• Indian companies with a presence in China, particularly in sectors deemed to be sensitive such as pharma and IT, will likely need to review their exposure to risks under the expanded law and broadened definitions of national security, particularly amid deteriorating relations between the neighbours.
• An increasing number of espionage cases against China have been found since 2014, requiring amendments.
• This fully demonstrates the necessity and urgency for China to update its anti-espionage law to protect its national security.