China and AI: what regulations?

5 points to remember :

  • China aims to become the world leader in artificial intelligence by 2030, particularly in the automotive and medical industries. E-health and e-pharmacy are priority areas for Chinese companies, which are beginning to develop digital platforms.
  • China has introduced numerous regulations on AI, notably on the protection of personal data, the supervision of algorithms and, more recently, the content of so-called generative AI.
  • Chinese users, suppliers, developers and companies are affected by the new Chinese regulations and are subject to various obligations under pain of sanctions
  • Compliance with the fundamental values of socialism and national unity, respect for intellectual property and transparency are the main principles we’re aiming for.
  • China diverges from European regulations, particularly in terms of respect for fundamental rights

Against a backdrop of rapid growth in artificial intelligence, China is keen to impose rules and aims to become the world leader in this sector by 2030, particularly in the automotive and medical industries. Healthcare is indeed a priority for China, which since 2014 has been the world’s second most advanced country in e-health. In 2014, the Chinese company Alibaba developed the AliHealth platform, which has become a benchmark in e-pharmacy.

Anchored in the New Silk Roads, China sees AI as a strategic sector, not least for its place in global innovation. What is China actually doing to regulate artificial intelligence? Can it become a real competitor to the European Union? What obligations do companies using artificial intelligence have to comply with? Zoom in on these Chinese practices and their main features.

  • Chronology of Chinese AI regulations

Considering AI as both a strategic sector and a threat to the stability of the regime, China has developed numerous laws and regulations. In 2015, the “Made in China 2025” plan launched by the Chinese State Council, aims to transform China into a true global player in high-tech manufacturing. As early as July 2017, a New Generation Artificial Intelligence Development Plan (AIDP) was published to address the various ethical, legal and also geopolitical issues.

Like the European Union, China has a data protection regulation, to be promulgated in 2021, aimed at protecting technology users from fraud and malicious initiatives. This text lays down obligations for digital companies, such as the need to request authorization to process personal biometric, medical, health and financial information. They will have to inform about the use of personal information, as the RGPD does in Europe. Failure to comply can result in fines of up to 5% of annual sales. They also run the risk of being suspended from service in the event of very serious misconduct. User rights are also included, such as the ability to refuse targeted advertising. Nevertheless, this regulation differs from the RGPD in that it does not apply to the government as well as to Chinese administrations, which will then be able to continue monitoring the population.

On March 1, 2022, it’s the turn of algorithms to be regulated, with new rules for users of Internet services when faced with recommendations made by algorithms. The provisions of these regulations mainly concern suppliers, who must explain how these mechanisms work and their purpose. This text aims to prohibit the production of false information, and to protect the elderly.

More recently, at the start of 2023, China passed a new law governing “synthesis technologies”, in order to regulate “deepfakes”, a technique enabling the manipulation of audio and video content using AI. The main principles of these regulations are data security and the protection of personal information, transparency, content management and technical security. It establishes strict rules at every stage of AI development and use, to make it easier to control.

Finally, the latest regulation, not yet in force but already having an impact, is from the Cyber Administration of China (CAC) – China’s cyberspace regulator – which published 21 regulatory articles on April 11, 2023. This law is aimed more at so-called generative AI, in a context where ChatGPT is booming. This framework will be developed further in this article, and can be compared with that of the European Union on certain points.

  • Who is affected by Chinese regulation?

Chinese regulations aim to protect users in the first instance, particularly in the face of corporate data breaches. Users are subject to obligations such as registering with digital services using their real name.

The supplier is the major player who has to comply with Chinese AI laws. The latest regulations require them to carry out a safety assessment before their services are made available online. They become responsible for any infringement of intellectual property or leakage of personal information.

The developer, on the other hand, is subject to a high level of technical control, which is very difficult for companies to achieve. Companies will undergo a preliminary evaluation before their AI system can be made available. Chinese software will also be subject to a safety inspection.

China, which is seeking to boost innovation, could end up losing out to Europe as a result of these strict regulations.

  • The main principles of AI regulation by China

China is keeping a very close eye on the development of artificial intelligence, particularly generative intelligence. One of the main principles of the regulations concerns “socialist values”. The recent draft regulations state that AI-generated content must “reflect fundamental socialist values and must not contain elements relating to the subversion of state power”. By way of example, AI service providers and developers are not allowed to promote anything that would undermine “national unity”. China intends to curb comments that promote terrorism, extremism, ethnic hatred or discrimination.

Another principle of their regulation is respect for intellectual property, which is in line with the European Union’s wishes. China attaches great importance to respecting copyright. Data quality is claimed.

Finally, transparency and measures to prevent users from becoming addicted to AI-generated content are included in the Chinese regulatory plan.

China’s ambition to become the world leader in AI makes it a competitor to the European Union. Its regulatory model has certain convergences with Europe, notably in terms of transparency and respect for intellectual property. Nevertheless, China’s project focuses more on promoting innovation, which goes hand in hand with political control, while the European Union emphasizes the need to protect fundamental rights and promote ethical outcomes. What is certain is that a new geopolitical race concerning AI is taking shape…