China's AI regulation is deliberately lax to promote the growth of domestic companies, according to Angela Huyue Zhang, a law professor at the University of Hong Kong.
The regulation follows a three-phase pattern: a relaxed phase that gives companies room to grow, a suddenly stricter phase, and then another relaxed phase.
This pattern was seen, for example, with Alibaba and Tencent, which were initially able to expand but were hit with antitrust penalties in 2020. However, the relationship between the government and tech companies is more symbiotic than adversarial, Zhang said.
AI is seen as critical to China's goals of technological dominance and self-sufficiency. The Chinese government is heavily involved in AI development, acting as a policymaker, incubator, investor, research provider, and customer. Behind every successful Chinese AI company is a local government that provides political protection, Zhang said.
China's current AI legislation is strict only in terms of freedom of speech and content control, but otherwise offers vague principles and few enforceable measures to protect against harm. Zhang believes that China's current regulations are more lax than those in Europe and the United States.
That could change in the future: According to Zhang, there is a conflict within the government between Internet regulators who want to prevent politically harmful content and authorities who want to boost China's technological capabilities. So far, the latter have had the upper hand. But a massive abuse of AI that threatens social stability could trigger a sudden shift toward stricter regulation, Zhang said.
China and the US are currently engaged in a technology race for AI leadership, similar to the arms race during the Cold War. The Chinese government aims to become the world leader in AI by 2030.
