Beijing is moving to stop forced tech transfer, but significant loopholes may remain.
The incidence of reported transfers was as high as 30% in chemical and petroleum industries.
The newly approved law will take effect next year on Jan. 1.
Chinese regulators are investigating complaints against Ericsson for breaking anti-trust rules in its licensing practices for 3G and 4G technology.
A recent report re-evaluates 5G timing and rollout following a critical development in December and recent signals from government bodies.