The Anti-Unfair Competition Law of the People's Republic of China, which was implemented by the Several Provisions on Prohibition of Infringement of Trade Secrets Act, provides a framework for the effective protection of trade secrets. According to Art. 2 of both laws, the term "trade secrets" refers to technical information and business information that is not known to the public, can bring economic benefits to the right holder, is practical, and has been kept confidential by the right holder. Art. 3 of the Several Provisions on Prohibition of Infringement of Trade Secrets Act outlines prohibitions against trade secret infringements, including obtaining trade secrets through improper means such as theft or coercion and disclosing or using such secrets. It also covers violations by business partners and employees who breach confidentiality agreements, as well as third parties who knowingly use or disclose obtained trade secrets. Moreover, Art. 7 states that violations of Art. 3 will be addressed by the administration for industry and commerce according to Art. 25 of the "Anti-Unfair Competition Law," which may involve ordering the cessation of illegal activities and imposing fines ranging from 10,000 to 200,000 yuan (approx. USD 1,500 to USD 30,000).
It is reported that, despite existing regulations, serious deficiencies in the protection and enforcement of trade secrets in China have raised concerns among stakeholders. Numerous cases of trade secret theft benefiting Chinese companies, both domestically and internationally, have been documented. Particularly troubling are reports that agents affiliated with the Chinese government and military have infiltrated the computer systems of foreign companies, stealing terabytes of data, including proprietary information and intellectual property, to provide commercial advantages to Chinese enterprises.

Under the Negative list 2021, foreign investment in radio stations, television stations, radio and television transmission networks, radio and television satellites, satellite uplink stations, satellite receiving stations, microwave stations, internet audio-visual program services, cyberculture operations (except for music) and internet information dissemination services (except for contents opened up in China's WTO commitments) is prohibited. It is also forbidden to engage in the business of video broadcasting by order of radio and TV and the installation services of ground receiving facilities for satellite TV broadcasting.

It is reported that there is an obligation for passive infrastructure sharing in China to deliver telecom services to end users. Moreover, passive infrastructure sharing is practised in both the mobile and fixed sectors based on commercial agreements.

The 2015 Foreign Investment Industrial Guidance Catalogue explicitly prohibits foreign investment in internet publishing, including online gaming (Art. 2), thereby designating this digital content sector as off-limits to foreign capital.

According to Art. 6 of the Provisions on Administration of Foreign-Invested Telecommunications Enterprises and Section VII of the Negative List 2021, for foreign-funded telecommunications enterprises operating value-added telecommunications services (including online database storing and searching; electronic data exchange; online data processing and transactions processing; domestic multiparty communication services; IP-VPN; ISP; ICP and video teleconferencing), the proportion of foreign investors' capital contribution in the enterprise shall not exceed 49% in the end. An exception applies to e-commerce, for which 100% foreign equity and ownership is allowed. Furthermore, the proportion of capital contribution between Chinese investors and foreign investors in foreign-invested telecommunications enterprises in different periods shall be determined by the industry and information technology department of the State Council in accordance with relevant regulations.
In addition, according to Art. 5 of the Provisions on Administration of Foreign-Invested Telecommunications Enterprises, if the enterprise is engaged in the basic telecom business within a province, autonomous region, or municipality directly under the Central Government, it shall have a registered capital of not less than 100 million yuan (approx. USD 14,000,000). However, if the enterprise is engaged in the basic telecom business nationwide or beyond a single province, autonomous region, or municipality directly under the Central Government, it shall have a registered capital of not less than 1 billion yuan (approx. USD 140,000,000).
Under the Special Management Measures for Foreign Investment Access (Negative List) 2021, authorities must treat foreign investors with the same degree of accommodation as domestic investors unless set out otherwise in the negative list. While no caps have been set out in the negative list with regard to basic telecommunication services, the negative list provides that the basic telecommunication business must be controlled by the Chinese party.

China’s national security review regime is primarily governed by the Measures on National Security Review of Foreign Investment (NSR Measures), issued on 19 December 2020 by the National Development and Reform Commission (NDRC) and MOFCOM. The NSR Measures build on earlier regulations, including the Circular of the General Office of the State Council on the Establishment of Security Review System Regarding Merger and Acquisition of Domestic Enterprises by Foreign Investors (2011 Circular) and the Measures for the National Security Review of Foreign Investment Pilot Free Trade Zones from the State Council General Office (Free Trade Zone Circular), which technically remain effective but have been rarely applied in practice.
The NSR Measures outline detailed rules for the national security review framework, managed by a Working Mechanism led by the NDRC and MOFCOM. The process consists of two stages: a General Review to assess whether a transaction requires further scrutiny, and a Special Review for a more in-depth assessment if potential national security risks are identified. According to Art. 4 of the Measures, the regime applies to foreign investments that: (i) involve control over enterprises in key sectors, such as critical infrastructure, technology, energy, and information services; or (ii) impact national security through equity acquisitions, asset purchases, or greenfield investments.
Furthermore, "control" is defined broadly, encompassing scenarios where foreign investors hold more than 50% equity, exert significant influence over operations or decision-making, or control key aspects of the business. It is reported that the NSR regime introduces clearer procedures compared to previous rules, it remains opaque regarding timelines, procedural details, and decision outcomes.

China Telecom Corporation Limited (China Telecom), the incumbent, is a wholly State-owned enterprise (SOE) providing basic, mobile, and value-added telecommunication services.

According to Art. 59 of the National Security Law of the People's Republic of China, the State shall establish comprehensive systems and mechanisms for national security review and oversight. These systems shall encompass the review of foreign commercial investments, special items and technologies, internet information technology products and services, projects related to national security, and other significant activities or matters that impact or could impact national security. Art. 60 provides that central state organs shall conduct national security reviews, issue opinions, and supervise enforcement in accordance with legal and administrative regulations. Moreover, Art. 61 mandates that provinces, autonomous regions, and directly governed municipalities shall be responsible for national security review and regulation within their administrative regions, ensuring compliance with the law.

It is reported that China does not mandate functional or accounting separation for operators with significant market power (SMP) in the telecom market.

According to the revised Art. 4 of the Rules for the Implementation of the Law of the People's Republic of China on Foreign-capital Enterprises, sectors in which the establishment of foreign-capital enterprise is forbidden or restricted are determined as per the state guidance for foreign investment orientation and guiding catalogue of industries for foreign development. According to Art. 5, an application for the establishment of foreign-funded enterprises will not be approved under one of the following circumstances: (a) detrimental to the sovereignty of China or the public interest of society; (b) endangering China's national security; (c) violation of Chinese laws and regulations; (d) does not meet the requirements of China's national economic development; (e) may cause environmental pollution; (f) may cause environmental pollution.

Telecom business activities in China are divided into Basic Telecom Services (BTS) and Value-added Telecom Services (VATS). BTS refers to the business of providing public network infrastructure, public data transmission and basic voice communications services. VATS refers to the telecom and information services provided through public network infrastructure. Both BTS and VATS operators require a license. VATS licenses are further divided into single-province licenses and cross-provincial licenses. A BTS licence is valid for five or ten years (depending on the type of telecom service involved), and a VATS licence is valid for five years. Telecom operators must meet the minimum registered capital requirements to be granted licences. For BTS operators, the minimum registered capital is RMB 100 million for single-province providers and RMB 1 billion for nationwide providers. For VATS operators, the minimum registered capital is RMB 1 million for single-province providers and RMB 10 million for nationwide providers. It is also reported that the licensing procedures are opaque and arbitrary. As a result, only a few dozen foreign-invested suppliers have secured VATS licenses, while there are thousands of licensed domestic suppliers.
Additionally, foreign companies must obtain VATS licenses only through a joint-venture company. In this regard, the European Chamber of Commerce in China has complained about the multiple value-added service licenses required, suggesting the approval of one single value-added service license that allows for the provision of multiple VATS.

A report by the National Development and Reform Commission of China and the Ministry of Finance bans the purchase of certain foreign IT products for selected government procurement lists. For example, one government procurement list banned ten Apple Inc. products, including the iPad, iPad Mini, MacBook Air and MacBook Pro.
A separate procurement list includes some Apple computers that departments can continue to buy on a smaller scale, i.e. purchases totalling less than 1.2 million yuan (USD 195,000). Products from Dell Inc., Hewlett-Packard Co. and Chinese maker Lenovo Group Ltd. were included on both lists. This ban applies to all central Communist Party departments, government ministries and local governments.

In June 2014, the Centre of Public Procurement of the Central Government issued the result of the public tender for central government procurement of electronic information products of 2014 (Vol. 21, GC-HJ140283). Under the "Antivirus Software" category, all foreign security providers such as Kaspersky and Symantec were excluded from the list. Only five Chinese providers, i.e. 360, Jiangmin, Rising, Kingsoft, and KILL, are listed for national security consideration.

The Administrative Measures for the Multi-level Protection of Information Security (MLPS) require all IT systems in China to be classified into different levels of security, from one to five (with the most sensitive systems designated as level 5). In 2019, the MLPS 2.0 (composed by GB/T 22239-2019, GB/T 25070-2019, and GB/T 28448-2019) has expanded the definition of 'information systems' to broader systems, including network infrastructure, cloud computing systems, mobile application platforms, connected devices and industrial control systems.
The MLPS 2.0 requires networks of level 3 and above to adopt network products and services appropriate to their security protection levels. Companies classified as level 2 and above require the procurement and use of encryption products and services to be preapproved by the Chinese government. Under the MLPS 2.0, companies must self-assess their security management and compliance, and such assessment results must be evaluated and endorsed by the MLPS regulatory body.
The MLPS 2.0 requires companies in China to set up their cloud infrastructure, including servers, virtualised networks, software, and information systems. Such cloud infrastructures are subject to testing and evaluation by the Chinese government. Overseas operation and maintenance of Chinese cloud computing platforms must also follow Chinese laws and regulations. The national standards also state that customers' data and users' personal information processed by cloud service providers should be stored inside China, which is an additional requirement. It is currently uncertain how these national standards would be enforced, and there have not yet been reports of enforcement.

Imported and exported encryption products must be certified by the Office of State Commercial Cryptography Administration (OSCCA). The use of encryption products without OSCCA certification is prohibited, regardless of the public, commercial or individual nature of use. However, it is reported that, in practice, only Chinese or Chinese-owned companies are eligible for OSCCA certification to sell, produce and carry out R&D for encryption technology in China, as well as to gain product licensing. Foreign or foreign-owned companies, even if based in China, are excluded. In practice, this means that using foreign encryption products in public procurement is effectively prohibited in China. International firms are therefore excluded from government contracts for ‘information security products’ such as smart cards, firewalls and secure databases.