BACKGROUND: Each year, 540 million Chinese are exposed to secondhand smoke (SHS), resulting in more than 100,000 deaths. Smoke-free policies have been demonstrated to decrease overall cigarette consumption, encourage smokers to quit, and protect the health of nonsmokers. However, restrictions on smoking in China remain limited and ineffective. Internal tobacco industry documents show that transnational tobacco companies (TTCs) have pursued a multifaceted strategy for undermining the adoption of restrictions on smoking in many countries. METHODS AND FINDINGS: To understand company activities in China related to SHS, we analyzed British American Tobacco's (BAT's) internal corporate documents produced in response to litigation against the major cigarette manufacturers to understand company activities in China related to SHS. BAT has carried out an extensive strategy to undermine the health policy agenda on SHS in China by attempting to divert public attention from SHS issues towards liver disease prevention, pushing the so-called "resocialisation of smoking" accommodation principles, and providing "training" for industry, public officials, and the media based on BAT's corporate agenda that SHS is an insignificant contributor to the larger issue of air pollution. CONCLUSIONS: The public health community in China should be aware of the tactics previously used by TTCs, including efforts by the tobacco industry to co-opt prominent Chinese benevolent organizations, when seeking to enact stronger restrictions on smoking in public places.