US Sanctions 5 Chinese Entities Over Alleged Trade Secret Theft, China Vows to Retaliate

The US Department of State added five Chinese entities to the sanctions list on October 19, 2026, under the US Intellectual Property Protection Act, accusing them of stealing trade secrets, according to the Xinhua News Agency.

The list included Shanghai Zisuan Technology, Miracle Plus, and three of their affiliated funds. The US Office of Foreign Assets Control added the entities to a sanctions list separate from the primary sanctioned parties list, prohibiting dealings with their property subject to US jurisdiction and restricting certain types of loans, banking transactions, currency transfers, and investments, while issuing two general licenses.

In response, a spokesperson for China's Ministry of Commerce said Beijing rejects the allegations, considering them a campaign to smear Chinese companies and harm their legitimate rights. He added that the growth of Chinese AI companies stems from research, development, and investment in innovation, not from the theft of trade secrets.

China urged Washington to cease what it described as unfair practices and to correct its erroneous actions, warning that it will take necessary measures to respond and protect the rights of its companies if sanctions persist. The move comes amid rising tech and trade tensions between the world's two largest economies.

What do these terms mean?

Trade Secrets: Confidential information that grants its owner a competitive advantage, such as manufacturing methods, data, or customer lists.

Primary Sanctions List: A US list containing individuals and entities subject to comprehensive sanctions, differing from less restrictive lists.

General License: An exemption issued by the US Treasury that allows certain previously prohibited transactions under specified conditions.