On April 2, 2026, China's Supreme People's Procuratorate (SPP) released six "typical cases" under the banner of "serving new quality productive forces." The framing was policy-heavy — references to the 15th Five-Year Plan, the Outline for Building an Intellectual Property Powerhouse (2021–2035), and high-level tech self-sufficiency. But buried in the bureaucratic language was a clear operational signal: Chinese prosecutors are escalating criminal enforcement of trade secret theft in semiconductors, and a relatively new criminal provision targeting foreign-linked disclosure is now being actively used.

For companies operating in or alongside China's tech ecosystem, this matters. Here is what the cases actually say — and what they mean.

The Headline Case: 14 Defendants, Wi-Fi 6 Chips, and a RMB 300 Million Valuation

The first and most detailed case involved Zhang, a former department head at a Shanghai-based subsidiary of a major technology company (identified as "Company Yi," a subsidiary of "Company Jia"), who left to found his own chip company — Zun Communications — and proceeded to replicate his former employer's Wi-Fi 6 chip technology.

The method was straightforward but systematic. Zhang recruited at least 11 former colleagues who, before and after resigning, captured proprietary technical information through screenshots, manual transcription, and WeChat transfers. Some were still employed at the original company while feeding information to Zun Communications. In total, 41 items of technical information were identified as trade secrets.

The Shanghai No. 3 Intermediate People's Court sentenced Zhang to six years in prison and a RMB 3 million fine (approximately USD 410,000). Four co-defendants received prison sentences of three to five years with fines of RMB 1.2 to 1.5 million. The remaining nine received suspended sentences.

What makes this case notable for foreign observers is not just the severity — it is the methodology. Prosecutors engaged industry experts to verify non-public nature and identity of the trade secrets, and established a "reasonable licensing fee" of RMB 317 million (approximately USD 43.5 million) using a cost-based valuation approach. All 14 defendants pleaded guilty.

Criminal Law applied: Article 219 — Trade Secret Infringement.

The Quieter but More Significant Case: Providing Semiconductor Data to Foreign Entities

The second case received less attention in international media but carries potentially broader implications.

A process integration engineer at a semiconductor company in Hangzhou, Zhang (a different individual), was found to have provided proprietary manufacturing process data and production capacity information to an external consulting engagement — one that he knew included foreign clients. His illegal gain: RMB 2,760 (approximately USD 380).

He was convicted under Article 219-1 of China's Criminal Law — the offense of "stealing, spying on, buying, or illegally providing trade secrets to foreign entities" — and received a prison sentence of one year and six months (suspended for two years) plus a RMB 12,000 fine.

The amount of money involved is trivial. But the legal provision is not. Article 219-1 was added by the Criminal Law Amendment (XI) in March 2021, creating a standalone offense for trade secret disclosure linked to foreign actors — distinct from the general trade secret infringement under Article 219. In April 2025, the Supreme People's Court and SPP jointly issued a judicial interpretation (Fa Shi [2025] No. 5) that significantly lowered the threshold for "serious circumstances" (the trigger for enhanced sentencing of five or more years) to RMB 300,000 in losses or illegal gains.

The Hangzhou prosecutors' approach is instructive. When the defense challenged whether the disclosed information was truly non-public, the prosecution ordered the expert institution to re-examine and narrowed the claimed trade secrets from three to two, excluding already-public information. The conviction ultimately rested on two specific data points: proprietary manufacturing process data and production capacity distribution information.

The Hangzhou procuratorate also submitted a policy report to local government recommending tighter regulation of commercial consulting practices — specifically targeting the use of domestic consulting firms as intermediaries for foreign entities seeking access to trade secrets.

Criminal Law applied: Article 219-1 — Providing Trade Secrets to Foreign Entities. Judicial reference: Fa Shi [2025] No. 5, effective August 2025.

The Other Four Cases: A Broader Enforcement Pattern

While the semiconductor cases dominate, the remaining four cases reinforce the breadth of the SPP's criminal IP enforcement agenda:

● Heavy machinery blueprints (Sichuan): Two defendants convicted for stealing customized equipment drawings from a state-affiliated import-export company's design institute. One defendant, initially treated as a witness, was prosecuted after investigators discovered he knowingly used the stolen drawings. Prison sentences of one to 1.5 years (suspended), fines of RMB 500,000–700,000. Article 219.

● Herbicide manufacturing technology (Shandong): Four individuals recruited from a chemical company stole proprietary production data for a low-toxicity herbicide (imazapic), earning RMB 1.26 million in illegal proceeds. The company defendant was fined RMB 1 million. Criminal damages of RMB 8 million were awarded alongside a civil compensation claim. Article 219.

● 3D mapping software circumvention (Guangdong): Two defendants developed and sold plugins that circumvented licensing controls on a 3D reconstruction software platform. The case is notable because prosecutors recharacterized the offense from "damaging computer information systems" to "copyright infringement" — correctly identifying the software's access controls as a copyright technical protection measure rather than a computer information system. Article 217(6).

● Counterfeit biological reagents (Chongqing): A sales engineer at a biotech company printed fake labels for gene-editing reagents and sold them to hospitals and research institutions, while simultaneously embezzling RMB 310,000 through fraudulent internal orders. Combined sentence of one year and nine months. Articles 213 and 271.

What This Means for Foreign Businesses

Three takeaways emerge from these cases:

1. Criminal enforcement is no longer theoretical. China has had trade secret criminal provisions for years. What is new is the operational intensity. The SPP is proactively selecting cases for publication that showcase prosecutorial capability — expert engagement, multi-defendant coordination, valuation methodology, and inter-agency collaboration. This is a system that is getting better at building and winning these cases.

2. Article 219-1 changes the compliance calculus. The "foreign entity" provision was added in 2021 but saw limited initial use. The Hangzhou semiconductor case, combined with the lowered sentencing thresholds in the 2025 judicial interpretation, signals that this provision is now being actively enforced. Any cross-border consulting arrangement, due diligence process, or technical collaboration that involves access to proprietary Chinese technology must be reviewed for criminal exposure — not just civil liability.

3. The "consulting firm loophole" is closing. The Hangzhou prosecutors explicitly identified domestic consulting firms as potential conduits for foreign actors seeking trade secrets. Companies that engage Chinese consultants, advisors, or intermediaries for technical intelligence should assume that Chinese authorities are watching these channels and may pursue criminal charges against individuals on both sides of the transaction.

What to Do Next

● Audit cross-border consulting arrangements. Review any engagement of Chinese technical consultants, industry analysts, or advisory firms that may have access to proprietary semiconductor, biotech, or other sensitive technology information. Ensure that consulting scopes do not inadvertently create Article 219-1 exposure.

● Update compliance training for China-based employees. The semiconductor engineer in Hangzhou earned RMB 2,760 and received a criminal conviction. Employees must understand that even small payments for providing technical information to foreign-linked parties can trigger criminal liability.

● Strengthen trade secret infrastructure before it becomes evidence. The Wi-Fi 6 chip case succeeded in part because the original company had clearly documented its trade secrets and confidentiality measures. If you have R&D operations in China, ensure your trade secret identification, documentation, and employee exit protocols are robust — because Chinese prosecutors are building cases around these very factors.

Bottom Line

China's IP criminal enforcement system has moved from a posture of selective, high-profile cases to systematic, sector-targeted prosecution. Semiconductors are the current priority. Foreign companies with technology operations, partnerships, or supply chain relationships in China should treat trade secret compliance not as a box-checking exercise but as a genuine risk management priority.

The Hangzhou case — RMB 2,760 in gains, a suspended prison sentence, and a policy recommendation to regulate consulting firms — may look minor. But as a precedent, it is anything but.