Year in review: Artificial Intelligence Law in China

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Year in review

China's high internet penetration rate and increasing enterprise digitisation have provided the AIGC industry with a favourable development environment, and the AIGC market offers an abundance of commercial prospects that can be realised on a sizeable scale. Currently, China's AIGC market has developed language and text generation applications (e.g., Ernie Bot), image generation applications (e.g., Tongyi Wanxiang), audio and video generation applications (e.g., Nuwa Robotics) and others (e.g., game development and healthcare). According to iResearching Consulting's forecast, China's AIGC industry will be worth about 14.3 billion yuan in 2023. This is before the sector enters what is predicted to be a period of cultivation of large model ecosystems, in which it will continue to build and improve the underlying algorithmic infrastructure, large language model business platforms and other new infrastructure elements required to nurture these technologies and their output, and develop mature product forms; China's AIGC industry is expected to generate revenues in the region of 720.2 billion yuan by 2028 and it is on a trajectory to firmly establish its operational domain, consolidate its technical value in key fields and business contexts, and gradually develop and refine the model-as-a-service industry ecosystem.

China's AIGC industry is expected to be worth more than 1 trillion yuan by 2030, with current predictions suggesting the sector could be generating revenues totalling 1.144 trillion yuan by that time.¹

The China New Generation Artificial Intelligence Technology Industry Development Report 2024 released in June 2024 indicates that China, based on independent innovation, has built an AI technology system that includes intelligent chips, large models, infrastructure and operating systems, tool chains, deep learning platforms and application technologies. The industrial innovation ecosystem and corporate alliances are gradually showing their key supporting effects on reshaping the industrial system and vigorously promoting a new type of industrialisation. Data indicates that in 2023, the scale of China's core AI industry reached 578.4 billion yuan, with a growth rate of 13.9 per cent. The adoption rate of generative AI among enterprises in China has reached 15 per cent, with a market size of approximately 144 trillion yuan. The Implementation Plan for Promoting Equipment Renewal in the Industrial Sector, jointly issued by the Ministry of Industry and Information Technology and six other departments, proposes that by 2027, the digital R&D design tool penetration rate and the key process computerisation rate for large-scale industrial enterprises will exceed 90 and 75 per cent, respectively.

In recent years, China has launched policies to promote the high-quality development of AI. In 2021, the State Council in its circular giving Notice of the '14th Five-Year Plan' for Digital Economy Development proposed targeting strategic and forward-looking areas such as sensors, quantum information, network communications, integrated circuits, key software, big data, AI, blockchain and new materials. The Report on the Government Work 2022 states that it is necessary to promote the development of the digital economy, accelerate the development of the industrial internet, cultivate and grow integrated circuits, AI and other digital industries, and enhance the technological innovation and supply capacity of key hardware and software. In 2022, the Ministry of Industry and Information Technology, the Ministry of Education, the Ministry of Culture and Tourism, the National Radio and Television Administration and the General Administration of Sport of China and another five departments jointly issued the Virtual Reality and Industry Application Integration Development Action Plan (2022–2026), which puts forward the task of promoting convergence and innovation in key technologies, enhancing China's internal capacity and the developmental potential of Virtual Reality+, accelerating breakthroughs in near-eye displays, rendering processing, sensory interactions, network transmission, content production, compression and encoding, security and trustworthiness, and other key segments, and reinforcing the in-depth fusion of new-generation information technologies such as 5G and AI. In July of the same year, the Ministry of Science and Technology, the Ministry of Education, the Ministry of Industry and Information Technology, the Ministry of Transport, the Ministry of Agriculture and Rural Affairs and the National Health Commission issued the Guiding Opinions on Accelerating Innovation Scenarios and Driving High-Quality Economic Growth with High-Level Applications of Artificial Intelligence, with the aim to comprehensively upgrade the quality and level of development of AI. On 4 March 2024, a press conference of the second session of the 14th National People's Congress (NPC) was held in the Press Release Hall of the Great Hall of the People. The spokesperson of the conference mentioned in response to questions from domestic and foreign journalists that in 2023, the Standing Committee of the NPC conducted a law enforcement inspection on the implementation of the Science and Technology Progress Law. The next step will be to study and promote legislation in the field of scientific and technological innovation, especially to delve into important issues related to ethics, morality, and safety in frontier science and technology fields such as AI and biotechnology, and continuously improve the legal system for science and technology. On 16 March 2024, the AI Good Governance Forum: A Prospect on the Legal Governance of Artificial Intelligence was held in Beijing. The conference released the Artificial Intelligence Law (Scholars' Suggested Draft). The drafting expert group was composed of experts from seven institutions, including the Data Rule of Law Research Institute of China University of Political Science and Law, the School of Rule of Law of Northwest University of Political Science and Law, the China Academy of Information and Communications Technology, the School of Law of Beihang University, the Digital Rule of Law Research Institute of East China University of Political Science and Law, the Institute of Science and Technology Law of Southwest University of Political Science and Law, and the Intellectual Property Research Center of Zhongnan University of Economics and Law. On 9 May, the General Office of the State Council issued the Legislative Work Plan of the State Council for the Year 2024, and several pieces of legislation related to the rule of law on the network are listed, and the Artificial Intelligence Bill is again included in the preparatory project for the consideration of the Standing Committee of the National People's Congress.

At the level of law-making, China has also introduced a series of laws and regulations to promote the healthy development of AIGC, and among these the following are of primary importance:

1. Administrative Measures for Generative Artificial Intelligence Service (the AIGC Measures);
2. Administrative Provisions on Deep Synthesis in Internet-Based Information Services (the Provisions on Deep Synthesis);
3. Administrative Provisions on Recommendation Algorithms in Internet-Based Information Services (the Provisions on Recommendation Algorithms); and
4. Provisions on the Security Assessment for Internet-Based Information Services Capable of Creating Public Opinions or Social Mobilisation (the Provisions on Security Assessment).