DragonAI - Contemporary Chinese Approaches to AI Governance
The global trend of Artificial Intelligence (AI) regulation can be summarized as “What regulation?”. However, the Chinese government is taking the lead with new forms of governance anchored in consequences for social cohesion and boosting productivity. China has become a leader in the AI space, not just with hardware and software but also regarding holistic applications across various sectors of society. The unique structure of China’s AI regulatory framework may become the gold standard for global governance and deployment of Artificial Intelligence in the 21st century.
Regulation
The main driver of Chinese AI development is public-private ventures backed by state institutions such as universities or think tanks. Smaller ventures also exist, supported by municipal governments to prop up homegrown AI firms in their region. Similar to other ISI (Import Substitution Industries), China has pursued a policy of over-saturation of small firms across the nation. While oversaturation dilutes the competitive nature of many firms, it also generates decentralized infrastructure and expertise
Regarding consumer-side AI software, the Chinese government has already demonstrated its commitment to strict rules for labeling AI-generated content. This stands in stark contrast to the United States, where few official constraints exist for the generation and use of AI-created media. Effective September 1st, 2025, all AI content within the Chinese internet must have a label marking it as synthetic media. If an internet provider suspects AI generation but the creator has not outwardly marked it as such, either with a clear icon or within its metadata, the internet provider must mark suspected synthetic media as such.
Regulation of Artificial Intelligence falls under the Cyberspace Administration of China (CAC). The CAC is an existing organizational body responsible for regulating the Chinese internet and has sweeping authority to pursue its regulatory mandate. According to several official statements from the CAC, the use of AI will continue to grow in China. AI is expected to expand within industrial settings alongside the already prevalent use of industrial robotics. The network of industrial internet that manages productive automation will see an integration of AI software for optimization. The CAC also emphasized its wishes for the United Nations to become a leader in global AI regulation and reiterated its commitment to compliance with international law regarding AI.
In July 2024, the Global AI Governance Action Plan was published during the 2024 World AI Conference in Shanghai. The plan was generally broad in its commitments, but did highlight China’s main focuses for AI development. Beyond a general statement regarding greater investment in AI technology and infrastructure, the plan called for a global framework for AI regulation spearheaded by the United Nations. As China has relatively robust safeguards for AI technology, it is likely that a global regulatory system would be based on its efforts once enough time has passed to prove if these laws have the desired impact on this emergent technology. By taking the lead in a largely unregulated field, China may be writing the rules for 21st or even 22nd-century AI. The United States is embracing the “wild west” approach to AI, the theory being that an unregulated marketplace will inspire competition and innovation. This approach does have drawbacks. Potentially dangerous technology could be used by bad actors, or the market could become stagnant with several large corporations holding a majority of patents/technical ability. In addition, the United States government has limited control over this technology and may struggle to assert itself in this space. In contrast, the People’s Republic of China has a much tighter control over the use and deployment of AI technology due to the existing regulatory framework within China and the funding schemes at the core of Chinese start-up companies. While possibly not as innovative as US companies, Chinese AI companies can rely on steady funding streams, and Chinese users can have more confidence in the efficacy of the AI products on the Chinese market. Due to the more stable arrangement, there are already plans to integrate AI within manufacturing and other heavy industries, which are usually risk-averse to new technologies on the assembly line.
Integration
There is a conscious effort by the PRC to use AI for the optimization of industry across all sectors. Municipal governments of large cities in China have created their own plans of implementation for AI. These plans call for the integration of Artificial Intelligence software into industry and civil governance, broadly referred to as “AI+”. For example, the “Beijing Municipal Action Plan to Promote AI+” outlines various use cases for AI software in many aspects of city life. The use of AI in transportation for varying degrees of autonomous vehicles by creating test areas and training AI models with data gathered from a diverse set of sensors. Creating AI agents at municipal agencies to field complaints or dispatch services, and using AI monitoring software for 24-hour electrical grid management. Due to the close collaboration between AI companies and the Chinese government, there is a greater appetite for application and experimentation at large city-wide scales. Not all applications will be rolled out at the same time. Rather, the city has begun to trial various avenues of application within civil society. This process, spread across the highly urbanized Chinese coastline, will generate massive amounts of data for training AI models. Because these models are not restricted by corporate ownership, the solutions can be shared across different software models and rapidly advance their potential deployment dates. The Beijing municipal government has also created a funding structure for new AI companies based on desired outcomes. The city has put forward specific benchmark breakthroughs and will reward any team/company that achieves them with a large cash payout, thereby combining the creative spirit of small teams with a centralized plan for outcomes.
Repercussion
On the whole, Chinese citizens are more optimistic about the potential advantages of AI. A Sandford-led opinion poll shows that only 35% of American citizens felt positive about the use of AI, compared to 78% of polled Chinese citizens (the highest of all nations surveyed).
Kevin Xu, founder and CIO of Interconnected Capital, in an interview, explained that China’s recent developmental history has primed its leadership and citizens to take a pragmatic mindset to emergent technology. The rapid rise in the Chinese telecom and computer industry from near-zero levels in the early 21st century is an example of how the widespread and top-down embrace of new technologies can propel the Chinese economy well above its “weight class”. The divergence in outlook on AI may come from the bottom-up approach seen in the United States, which is more chaotic and lacks a coherent goal for all AI companies.
Future
The future of Chinese AI is likely within the optimization of existing industries. There are large data sets for AI to be trained on, especially within the production of labor-intensive products such as Electric Vehicles. The potential of AI could allow for Chinese products to break into competitive markets by lowering costs and increasing productivity rates. However, as AI technology grows, the social implications of generative AI and artificial personhood could sour the great industrial gains. One thing is certain: China is and will continue to be a global driver of AI innovation for the next century.
