* State secrets draft law codifies what a secret is
* State assets body defines commercial secrets after trial
* Telecoms, Internet firms must give access to information
By Lucy Hornby
BEIJING, April 27 China has issued definitions
of what constitutes commercial secrets for its hundreds of
state-owned firms, in line with a draft law that also requires
telecommunications and Internet operators to give authorities
access to information sent through their networks.
The draft is part of an effort to codify what is a secret
in China, after a trial of four Rio Tinto (RIO.AX)(RIO.L)
employees drew international attention to the country's vague
secrets laws. Those laws have long concern human rights
Regulations on commercial secrets issued by the State-Owned
Assets Supervision and Administration Commission were dated
March 25, the day after the trial of Rio Tinto's Shanghai-based
iron ore managers. They were published late on Monday.
The Rio employees' detentions and trial alarmed both
Chinese and foreign investors because of the lack of definition
in China of what makes up state or commercial secrets.
The issue is of particular concern to business because
state-owned enterprises, which dominate many industrial
sectors, are both competitive listed entities and an integral
part of the state-directed economic model China imported from
the Soviet Union.
Negotiations with those firms can therefore easily touch on
matters that the Chinese state deems of national interest.
Commercial secrets for state-owned firms include
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, according to the notice posted on SASAC's website
late on Monday.
The regulations prevent information from being secret
forever by requiring the company to set a time limit when it
classifies information as either "core commercial secret" or
"standard commercial secret".
SASAC published its regulations after China's legislature
reviewed for a third time an amendment to the Law on Guarding
State Secrets, which China has been updating to include
information sent through modern communication networks.
Legal and rights advocates contend the ruling Communist
Party uses secrets laws to prosecute critics and people who
reveal information embarrassing to the party or powerful
"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," the
China Daily said on Tuesday.
The requirement for communications and Internet firms to
reveal information applies to Chinese and foreign firms, it
The four Rio employees, including Australian citizen Stern
Hu, were jailed for accepting bribes and infringing commercial
secrets during tense negotiations over iron ore prices in 2009.
Rio Tinto promptly fired the four for "deplorable
behaviour" but cleared itself in an internal audit of any
The commercial secrets portion of the trial was closed,
even to Australian diplomats, despite consular agreements, and
defence lawyers were reluctant to talk about it.
According to a text of the Rio Tinto verdict, published by
The Australian newspaper, the commercial secrets obtained by
the four included discussions at meetings of the China Iron and
Steel Association attended by numerous steel mill executives,
and production cuts by Shougang Corp in Beijing which the
defence countered had been published in Chinese newspapers.