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Artificial intelligence remains a hot topic in China — covering investment, policy, ethics and governance — and some important developments have taken place in the past several weeks.
On 27 Aug., the State Council of China released the "AI Plus" plan that is aimed at integrating AI across a wide range of fields. The plan prioritizes adoption in science and technology, "industrial development," consumer services, public welfare, governance and international cooperation. This national strategy will guide China's AI development in the years ahead, driving technological innovation, ecosystem building, investment and governance. Clear milestones for AI penetration in key sectors have been set to surpass 70% by 2027 and 90% by 2030. By 2035, China envisions a fully intelligent economy and society.
Major tech giants, including Alibaba and Tencent, have doubled down with significant investments in AI. Leading AI unicorn DeepSeek recently made headlines by releasing new open-source models and announcing plans for an initial public offering, sparking strong investor interest.
On the governance side, regulators in China remain highly active.
On 22 Aug., the Ministry of Industry and Information Technology, together with the Ministry of Science and Technology, the Cyberspace Administration of China and other agencies, issued draft AI ethics rules for public consultation.
The draft ethics rules apply to all AI research and development and services in China that could affect health and safety, reputation, the environment, public order and sustainability. Developers and service providers must adhere to principles of fairness, accountability, justice, risk responsibility and respect for life and human dignity. AI projects falling under the rules must undergo ethics review, either internally by ethics committees or externally through qualified service centers. Regulators are also preparing a detailed list of high-risk AI activities, such as algorithms that can mobilize public opinion or automated decision-making systems with major safety and health implications that will require expert second-level review.
Another major shift came 1 Sept. with the rollout of China's mandatory AI labeling rules. AI-generated content service providers must now clearly mark AI-generated content. Visible labels with AI symbols are required for chatbots, AI writing, synthetic voices, face generation/swap and immersive scene creation or editing. For other AI-generated content, hidden labels, such as watermarks, are acceptable. Internet platforms must act as watchdogs; if they detect or suspect AI-generated content, they must alert users and may add implicit labels themselves.
Non-compliance carries serious consequences, including regulatory investigations, fines, business suspensions and revocation of business permits. In severe cases, criminal liability under the Cybersecurity Law, Data Security Law and Personal Information Protection Law may be triggered.
China's AI ecosystem will undoubtedly continue to evolve at a breakneck speed, offering vast opportunities alongside significant challenges.
Barbara Li, CIPP/E, is a partner at Reed Smith.