Published by ChinaMNC · Wuzhou

China’s New AI and Employment Policy: What Foreign Founders Need to Know

A practical guide for foreign entrepreneurs on China’s latest policy to harness AI for job creation while mitigating employment risks, covering incentives, talent, and compliance requirements.

Overview of the Policy

The General Office of China’s State Council has issued a comprehensive opinion on adapting to artificial intelligence (AI) development and fostering an employment-friendly development model. The policy aims to maximize AI’s positive effects on job creation, traditional role enhancement, employment quality, and entrepreneurship, while mitigating job displacement. For foreign founders operating or registering a company in China, this signals both opportunities and compliance expectations.

Key Opportunities for Foreign Founders

1. New AI Job Spaces and Support for Startups

The policy promotes the “AI+” initiative, encouraging eastern regions to build core AI industries and central-western regions to undertake data labeling and smart device manufacturing. Foreign founders in AI can tap into these regional clusters. The government will support smart-native enterprises and specialized “little giant” firms by including eligible companies in special loan programs for job stabilization and expansion. This could ease access to financing for foreign-invested AI startups.

2. Support for SMEs and Entrepreneurship

An AI SME entrepreneurship support program will leverage open-source ecosystems. Public digital transformation services will be enhanced, with a push for “small, fast, light, and precise” digital products. SMEs and individual businesses are guaranteed equal access to data, algorithms, and other intelligent production factors. Foreign founders running SMEs can explore low-cost, lightweight AI upgrades to lower application thresholds and improve labor absorption.

3. New Employment and Entrepreneurship Models

Government investment funds, such as the National Venture Capital Guidance Fund and the National AI Industry Investment Fund, will support AI enterprise innovation on a market-oriented basis. High-level AI open-source communities and projects will be built. Entrepreneurship models combining tech achievements, industry development, vocational skills, and livelihood needs will be promoted. Foreign founders can leverage these policies for incubation services and support when launching AI-driven ventures.

4. New Occupations and Skills Development

The policy accelerates the development of new occupations and standards, expanding demand for roles like digital managers, AI engineers, and AI trainers. Localities are encouraged to add AI-related professional titles and skill-level certifications. Foreign companies can benefit from a growing talent pool with recognized AI skills.

5. Talent Cultivation and Training

Universities and vocational schools will dynamically adjust curricula, adding AI micro-majors and interdisciplinary programs. School-enterprise joint training is encouraged, with tech-leading enterprises participating in course development and teaching. A national AI training program will offer public courses via platforms like the National Smart Education Public Service Platform. Foreign founders can collaborate with educational institutions for talent pipelines and upskilling.

Compliance and Risk Management

1. Mitigating Employment Displacement

AI application in labor-intensive industries should be advanced steadily, with companies encouraged to establish unemployment buffer periods, notify affected workers in advance, and provide transition support. Foreign employers must plan for social impact when deploying AI.

2. Employment Risk Assessment

For AI application projects that may cause significant employment shocks in market access areas, employment risk assessments will be conducted during review. Other projects may also require assessments. Foreign founders should prepare for such evaluations when seeking approvals.

3. Labor Rights Protection

Labor rights in human-machine collaboration will be strengthened. Companies must ensure rights to remuneration, rest, and safety, and regulate AI in HR management to prevent algorithmic discrimination, false recruitment, and privacy violations. Foreign firms should review their AI-HR practices for compliance.

4. Social Security for Flexible Workers

Social security systems will become more flexible, encouraging flexible workers and new employment forms to join urban employee pension insurance and expanding occupational injury insurance pilots. Foreign companies hiring flexible workers should stay informed.

5. Income Distribution and Monitoring

Companies are guided to establish salary systems suited to AI professionals, with incentive mechanisms for high-level talent and minimum wage references for skilled workers. Employment risk monitoring and early warning will be strengthened through data sharing and research. Foreign founders should monitor policy updates and participate in industry dialogue.

Implementation and Coordination

Local governments and departments must implement the policy, prioritizing employment and considering AI’s employment impact. Human resources and development agencies will coordinate. Foreign founders should engage with local authorities for guidance and stay informed about regional incentives.

Call to Action

For assistance with company registration and operations in China, foreign founders can contact ChinaMNC on WhatsApp or WeChat at +86 153 1898 8535.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.