Blueprint to Action Chinas Path to AI-Powered Industry Transformation 2025

1.3 Multi-level policy design to accelerate AI implementation China’s AI policy is characterized by a coordinated effort between the central government and various levels of local government. The central government provides the overarching strategic direction for AI development, while local governments focus on implementing these strategies and supporting industry growth. This multi-tiered approach allows for the creation of clusters that play to regional strengths and industry-specific advantages, thereby facilitating a comprehensive national AI ecosystem. To encourage practical applications of AI, for example, the central government emphasizes both coordination and self-sufficiency among local governments. To achieve this, provinces and cities are actively establishing policy support systems tailored to their specific stages of AI development. For instance, Shanghai has issued China’s first provincial-level regulation for industrial AI development,14 while Guangzhou is focused on promoting the integrated construction of its “vehicle-road-city” model,15 which encompasses smart transport, infrastructure and urban planning. This multifaceted approach not only tackles local challenges, but ultimately contributes to a more cohesive and effective AI ecosystem across China. The development of AI in China is, however, marked by significant regional disparities, largely due to uneven economic development across the country. The central government provides the overarching strategic direction for AI development, while local governments focus on implementing these strategies and supporting industry growth.1.2 Adaptive regulations balancing development, safety and governance A distinguishing feature of China’s approach is the integrated relationship between the government and its highly regulated technology sector. The country has many existing regulations that impact the development and use of AI in China. Examples include the Next Generation Artificial Intelligence Governance Principles (2019),9 Next Generation Artificial Intelligence Code of Ethics (2021)10 and Interim Measures for Ethical Review of Science and Technology (2023).11 In addition, various existing regulations address areas such as algorithm recommendations, deepfakes and content labelling. For instance, Management Measures for Internet Information Service Deep Synthesis (2022)12 aims to regulate deepfake generation, from creation to dissemination. Meanwhile, the AI Safety Governance Framework (2024) governs the classification of AI risks and corresponding safety guidelines for algorithm developers and service providers. Though the principle of balancing innovation with responsible development has been established in China, the regulatory landscape continues to evolve rapidly. To provide clear directives that ensure safety while encouraging innovation for genAI, the government also issued the directive Interim Measures for the Management of Generative AI Services (2023).13 The frameworks establish a tiered regulatory approach that is both cautious and flexible, allowing companies to test new products and technologies in real market conditions under the supervision of regulatory authorities. 10 Blueprint to Action: China’s Path to AI-Powered Industry Transformation