Chinese “state secrets” demystified

According to the State Secrets Law, state secrets refer to matters with “a vital bearing” on national security and interests, which are disclosed to certain people for a given period of time in accordance with statutory procedures. The law further provides for seven categories of matters that can be determined as state secrets:

• secrets concerning major policy decisions on state affairs;
• secrets in the building of national defense and in the activities of armed forces;
• secrets in diplomatic activities and in the activities related to foreign affairs, as well as secrets to be kept as commitments to foreign countries;
• secrets regarding national economic and social development;
• secrets concerning science and technology;
• secrets concerning the activities for safeguarding national security and investigations of criminal offences; and
• other matters that are classified as state secrets by the department of state secret security.

Such writing suggests that the purpose is to allow for unlimited government discretion when determining state secrets and moreover prohibit any unauthorized disclosure or transmission outside of China.

Formation

The law's defined scope of state secrets is both broad and vague, so it is worth understanding the process of how a state secret is formed.

As a general principle, the particulars which form the scope and categories for state secrets is defined at the highest level by the National Administration for the Protection of State Secrets, in consultation with the Ministry of Foreign Affairs, Ministry of Public Security and Ministry of State Security, as well as other relevant central organs. The wide range of administrative bodies involved in the decision-making process leads to the broad scope of state secrets.

At the organizational level, groups with the authority to define state secrets (usually government organs) will have the person responsible take charge in determining, adjusting and declassifying state secrets for their respective agencies.

Therefore, when ascertaining whether a certain piece of information constitutes as a state secret, it is advisable to first enquire, where possible, with the group or individual that created the data, to confirm its legal status. However, when an actual dispute arises during or after the transmission, the relevant administrative department will review the information in question and make the final decision.

The State Secrets Law does not defend against the unauthorized disclosure of state secrets, so any such disclosure will result in legal liability under Chinese law, including disciplinary measures and, in extreme circumstances, criminal liability. While disciplinary measures are often sanctions against government employees, criminal penalties may also be imposed on individuals.

State secrets in practice

Acknowledging that under PRC law ambiguity surrounds the term “state secrets”, government departments will from time to time publish example cases involving the determination of state secrets to educate the public. Some of these cases can be helpful in describing how certain state secrets are leaked.

In general, state secrets leakage can be defined in various ways, such as communicating with foreign entities or individuals, spreading information through media or other publications, connecting work computers to external networks, sending emails, downloading materials onto portable disks, printing or photocopying files, transferring personnel, etc.

Based on an analysis of published cases, the type of data mainly falls under one of five categories. In every single case, the individuals involved have all been punished for leaking state secrets:

1. Operations of state organs and SOEs

The first type of information is that relating to the operations of state organs, such as the government ministries, municipal government, Administration for Industry and Commerce (AIC), police offices, as well as state-owned enterprises (SOEs). Reported cases include:

• A state official participates in a government meeting and takes notes of the speech made by one of the speakers. Later on, the official uploads these notes on the internet without performing any kind of state secret review or obtaining approval from relevant authorities.
• A local AIC official uploads a confidential document onto the AIC's website, which can be accessed by the public.
• An SOE employee uploads two confidential documents onto the SOE's OA system and fails to delete them after becoming aware of their leakage.
• A police officer loses two coded telegrams from the Anti-terrorism Division of the local Public Security Bureau.
• Eight individuals from the National Bureau of Statistics and People's Bank of China are prosecuted for leaking macro-economic data, such as CPI, before the government's official announcement.
• Information contained in a land utilization plan for the past year made by a city Land and Resources Bureau is considered a state secret.
• The information on the process of promoting or recruiting certain individuals as government employees falls within the scope of state secrets.

2. Military and national defense

Any information related to the Chinese military and national defense is considered a key state secret. The following cases have been published:

• A Chinese citizen, who happens to be a military enthusiast, takes some photos of a military base, including the military aircraft and airport, and uploads the images online.
• A Chinese citizen records a video of several military aircrafts and uploads the footage online.
• In order to organize a military-themed exhibition, a private company collects some pictures and materials of military equipment from the internet. Most of the information collected is public, but one item regarding the data of a certain weapon was later found to be a state secret.
• An employee of a military industrial institution provides several documents relating to the projects he has worked on to the consulate of a foreign country for immigration purposes.

2. Scientific and other state projects

Data containing scientific, technological and other major projects held by the government is also a state secret. Cases involving leakage of such material include:

• A former state official discloses information on the government's pricing in the negotiation process of 12 major projects with a foreign country.
• A former employee of a research institution participates in the design of a major state project, and publishes an article relating to the project online.
• An employee of a Geological Survey Bureau connects his work laptop to the external internet leading to the leakage of eight relief maps.
• An official of a local Electric Power Bureau discloses information related to the bidding and negotiation of a provincial project to a foreign company.
• The Ministry of Environmental Protection considers the survey method and data of a national soil pollution survey to be a state secret.

4. Education information

Material containing information on education, such as university examination papers and answers, is considered a state secret. The two following instances have been reported:

• A Chinese citizen uploads the exam papers for the National Cost Engineer Qualification Exam before the exam takes place.
• A Chinese citizen records the exam papers for the Doctor Qualification Exam and shares them with a training institution before the exam.

5. Criminal prosecution information

Finally, any information regarding criminal investigations or prosecution is considered a state secret as well. Example cases include:

• In a case concerning the prosecution of a drug offense, a defense attorney reviewed certain case materials and later showed them to the defendant's wife who then made a copy with the attorney's knowledge. The local state secret authority subsequently reviewed these materials and found that there were 18 items involving state secrets.
• A government anti-corruption official disclosed the details of a bribery investigation, including the status and developments, to the suspect.

Practical considerations and careful measures

Even if a document is not marked as classified by relevant authorities, it may still be illegal in terms of state secrets. Also, a production order issued by a foreign court or arbitral tribunal per se is not a defense for unauthorized disclosure of state secrets. In practice, during overseas litigation, any evidence with a high risk of containing state secrets shall be screened by a PRC lawyer before it is produced. State secrets are also protected in domestic litigation and arbitration proceedings. For example, in a Chinese court, if a piece of evidence contains state secrets, the hearing will be held in closed sessions and will not be open to the public. It is for these reasons that extra precaution during cross-border discovery or data transfer is crucial and that the true legal nature of the document is investigated.

Now that many MNCs are working with Chinese SOEs, this entails much greater risks as many business aspects of SOEs encroach into the realm of what is considered to be national economic interests and are therefore state secrets, even if that information appears prima facie to be used in the ordinary conduct of business.

There is really no excuse for international companies to overlook this issue of state secret information, considering the potential severe penalties and negative publicity. The most prudent way to deal with data transmission outside of China is to carefully review the content and see if there is even just a slight chance of containing state secrets. If it is determined that the risk of revealing state secrets is high, it is strongly advisable to seek a legal opinion and conduct a state secrecy review.

It may also be practical to consult with the relevant government department(s) that originally produced the information so as to obtain approval for its use as data that may be provided to a foreign government agency, a foreign court or other foreign parties. When there arises a dilemma of facing contradictory legal requirements of different jurisdictions, it is best to take the measures discussed above in order to minimize the potential legal liabilities under Chinese state secrets law.

Jianwei (Jerry) Fang and Jieqiong Fei, Global Law Office, Shanghai