Tech, talent, and data are intrinsically linked to methods of state secrecy, as is particularly the case in China. Notably, the dual use of these technological innovations makes for an offensive shield that China can wield against Western influence.
Recent developments in China’s inbound and outbound regulation of technology have shown a major transformation in objectives across two critical imperatives: sovereign data control and enclosed intellectual property (IP), and the state’s governance in research and development (R&D) of critical emerging technologies. This creates a restricted ecosystem, where information is closed and controlled, often referred to as a “walled garden”. China used a similar enclosure, what we call a data-IP walled garden through classifying important data, controlling advanced technology, and updating Article 12 of the Export Control Law for technology and exits of individuals who violate rules. The latter leverages immigration control and border enforcement to advance China’s national security objective and technological self-reliance agenda to counter US influence.
From Defensive Measure to Offensive Regulations
On 31 July 2026, Premier Li Qiang issued the new Regulation on Exit and Entry Administration (Decree No. 841) that explicitly codified the link between immigration, technological sovereignty, and national security. The execution is based on the four governing pillars: outbound travel alerts, legal grounds to exit bans, controlling foreign entry, and establishing a registration system.
The macro-regulatory mechanism of Decree No. 841 operates through inbound (Foreign Investment Law, mandatory security review, and a Catalog of Encouraged Industries for Foreign Investment) and outbound regulations (Export Control Law and Data Security Law). The strategic objective of this regulation is to secure industrial policy and achieve technological supremacy by leveraging talent and technological mobility restrictions.
On the other hand, the legal-operational execution of Decree No. 841 is implemented within broader national security priorities listed in China’s most recent white paper deepened the state’s control over individual mobility whose actions, from the government’s perspective, could compromise the national security. This reflects a shift in the structural execution of security policy towards offensive containment, aggressively weaponising the resources’ access to attain sovereign technological access. Whereas, before 2020, China focused on defensive data inspection, licensing systems, foreign investment, and national security.
China’s Human IP Shield
The evolution of China’s defensive posture to offensive containment has catalysed the US and China strategic competition by restricting over immigration and actively shielding its domestic IP. The real application of the trend is to counter the US-based entity list; Beijing shifted from the defensive measures of getting electronic design automation (EDA) and extreme ultraviolet (EUV) lithography to the offensive measure of weaponising the outbound transfer of IP.
The mobility of human capital is effectively viewed as a threat to the national industries and technological security. This is because the codes, algorithms, blueprints, and data all remain inside the minds of elite engineers, regardless of any safety measure put in place to safeguard systems and information, therefore they become a threat to the IP shield. As such, Beijing has systematically adopted strict regulations to retain data and human IP within its borders. Along with the firewall and patent, the regulation locks the IP by retaining AI technology and emerging talent at home. If engineers’ brains hold critical data linked with national security, they need to be kept close. This was the case with the travel restrictions that turned from state-imposed measures to restrictions set upon private companies. Leading to instances such as, Manus-AI co-founders Xiao Hong and Ji Yichao being barred from international travel, and the restriction of exit permits for employees from Alibaba and DeepSeek.
The modern-day race for AI and protected data transfer could be equated to the scramble for nuclear weapons during the Cold War, in particular China’s Two Bombs, One Satellite program. During this period, Chinese nuclear scientists were isolated and banned from travelling internationally to safeguard information regarding China’s nuclear programme. The modern seizure of passports from employees in state-owned enterprises reflects this sentiment, ensuring “state secrets” are secure and national security is prioritised over all else. This is worked legally under Tuo Mi (脱密), meaning literally to ‘remove secrecy,’ a protocol which mandates the barring of travel for a declassification period (ranging from 1 to 5 years) based on the sensitivity of data an employee might hold.
This specific legal mechanism of Tuo Mi has now evolved into a restriction over state-owned enterprises and private firms. To remain economically competitive, the declassification period was kept for 6 months for engineers to maintain secrecy against theft and corporate espionage.
Edward Snowden’s mass information leaks in 2013, which uncovered numerous hacking operations in mainland China, prompted a radical shift in national security policies towards protecting data and intelligence systems, expanding China’s secrecy policies to commercial technology and IP. The declassification period extended the 6-month timeline to 5 years, circumventing the labour market flow to ensure Chinese data remained within Chinese borders. And it is this techno-nationalist logic that continues to inform Chinese policymakers and the decision to insulate AI sectors and emerging technologies.
Moving Away from Offshore Strategy
China’s travel restrictions have shaped the country’s strategic competitiveness in these sectors, effectively creating a major element to attract and retain elite researchers and engineers at the global level. Beijing’s tactics of offshore washing through Singapore allowed Meta-Manus deal of over US $2 billion in December 2025. However, in April 2026, China’s National Development and Reform Commission (NDRC) blocked the acquisition of Manus-AI by Meta, a US-based company, on the basis that it was a violation of domestic law. China reasoned that the banning of the export of Manus AI is not a regular trade issue and signaled the AI asset export based on protecting national security.
China justified the deal block on a national security basis, using substance-over-form approach. The National Development and Reform Commission, moved beyond the legal form of the transaction and focused upon the underlying economic and financial realities of the transaction —i.e., its operations, R&D, the origin of IP rights, and the risk posed to China’s markets and sectors should their engineers be taken by competitors in other countries. In short, the state mandated compliance in order to achieve technological superiority.
In addition to this, Beijing has modernised its authentication mechanism where companies have to comply with ‘Xinchuang’ (信创), mandates that aim to remove American presence from Chinese technology industries. This is based on a rising corporate strategy of ‘acquihiring’, referring to the acquiring of companies for their employees rather than specific products or services – within AI, quantum technology and blockchain sectors. What we can infer from these actions then, is China’s wariness over the likelihood that Meta will acquihire Manus AI’s engineers, effectively poaching not just Chinese talent, but the valuable information they hold, and bring them into Western labs.
Heading to Achieve Monopoly
To neutralise Washington’s threat of talent extractions, Beijing has weaponised its cognitive front – by restricting the movement of engineers, invoking Decree No. 841, and cancelling the Meta-Manus deal – in addition to its physical front – imposing strict control over the supply of semiconductors and critical minerals, such as, gallium and germanium.
This creates a defensive wall against the Western-led Pax Silica alliances and the banning of Nvidia’s AI chip sales to China. In its attempt to match and compete with the US’s lucrative R&D opportunities, China has tightened its grip on its talent through national security policies and secured its sectors through controlling the supply of minerals. As reported by the International Energy Agency, China exercises a de facto monopoly over the global supply of the critical minerals, achieved through the strict regulations on imports and exports of technology.
The broader implication here is that whoever controls the monopoly of technology is able to lead a global regime over IP, and assert control over global IP standards, critical minerals, and chip chokepoints. As such, the desire to gain access to this monopoly of emerging technologies is a desire to maintain sovereignty and safeguard one’s economy, which will inherently incentivise offensive postures.
China is prioritising the security of their technology industries, talent, data, and critical minerals to build the shield and signals that if the US blocks the chip, China will starve the lab. However, what both powers should realise is that the global governance of emerging technologies, like AI, and their supply chains are interdependent; the tit-for-tat control will only bifurcate global AI governance and weaponise AI safety and ethical standards.
Nistha Kumari Singh is a Doctoral Candidate and Dr. TMA Pai Fellow at the Department of Geopolitics and International Relations, Manipal Institute of Social Sciences, Humanities and Arts, Manipal Academy of Higher Education (MAHE, Institution of Eminence), Manipal, Karnataka, India. She is also a Network for the Advancement of Technology Geopolitics (NAST) Fellow (2025–2026 Cohort) at the Takshashila Institution, Bengaluru, India. Her research lies at the intersection of cybersecurity, emerging technologies, and great power competition, with a particular focus on US–China strategic competition.
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