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

A practical ChinaMNC guide for foreign founders on the State Council’s new AI and employment policy, covering hiring, training, social insurance and compliance priorities.

Why China’s AI Employment Policy Matters for Foreign Founders

China’s State Council has issued a policy document aimed at helping the labour market adapt to artificial intelligence while building what it calls an employment-friendly development model. The policy was released through the investment project approval platform run by the National Information Center. For foreign founders setting up or running a company in China, the document signals where regulators want AI adoption to go — and what employers should prepare for.

The policy treats employment as the most basic element of people’s livelihood. It is framed around promoting high-quality, fully adequate employment while capturing AI’s positive effects and limiting job displacement. Below is a practical summary of the measures most relevant to foreign-invested companies.

New Job Opportunities and Support for Smaller Firms

AI-related growth areas

China plans to expand the “AI+” initiative. Eastern regions are encouraged to build core AI industries, while central and western regions are guided to take on upstream and downstream activities such as data annotation and smart terminal manufacturing. The policy also calls for nurturing AI-native companies and specialised, refined, distinctive and innovative “little giant” enterprises. Eligible companies can be included in a special loan programme intended to stabilise and expand employment.

Help for SMEs and individual businesses

An AI entrepreneurship support plan for small and medium-sized enterprises is to be implemented, with open-source ecosystems used to encourage innovation. The government wants better public services for digital transformation and encourages “small, fast, light and precise” digital products and solutions. SMEs and individual industrial and commercial households should be able to use data, algorithms and other intelligent production factors on an equal footing under the law. Lower-cost, lightweight intelligent upgrading paths are encouraged to reduce barriers to AI adoption and improve the capacity to absorb workers.

Skills, New Occupations and Talent Development

The policy calls for faster development of new occupations and occupation standards in AI-related fields. Demand should grow for roles such as digital management professionals, AI engineering technicians and AI trainers. Localities are encouraged to add relevant professional titles for evaluation and to carry out occupational skill level recognition for AI-related work.

Universities and vocational schools, including technical colleges, are encouraged to adjust disciplines dynamically, make urgent AI-related subject arrangements, build interdisciplinary programmes, add AI “micro-majors” and run compound talent training projects. School-enterprise cooperation is emphasised, with leading technology companies encouraged to help develop courses, train teachers and upgrade teaching facilities. AI education is to be promoted at all stages, including student placements in enterprises and engineers teaching in schools.

A dedicated AI training plan is also outlined. Local project-based and order-based digital skills training should match AI market demand, with participation encouraged from university graduates, young people, migrant workers and unemployed people. Public training bases, enterprise training bases and high-skilled talent training bases are encouraged to offer AI-related skills training. Public-interest courses are to be expanded through national education platforms, and AI-related skills competitions are encouraged within existing vocational skills contests.

Protecting Workers During AI Adoption

The document asks employers to apply AI first in roles where labour is scarce or conditions are dangerous. In labour-intensive industries, the scope, intensity and pace of AI application should be handled prudently to reduce the impact on workers. Companies are encouraged to explore an unemployment buffer period, notifying affected workers in advance and providing support for job transitions when AI is rolled out on a large scale.

A job risk assessment mechanism is to be established for AI applications. For market access projects that could cause significant employment disruption, an employment risk assessment should be carried out during review, with authorities coordinating transition and reassignment support. Other AI application projects should conduct assessments according to their circumstances.

Workers affected by AI-related job substitution are to receive employment assistance where eligible, including career guidance, skills training, job referrals and entrepreneurship support. Unemployment insurance benefits should be paid promptly and in full to eligible insured unemployed people under the rules.

The policy also addresses worker rights in human-machine collaboration. Research on basic rights protection is to be strengthened, consultation and coordination mechanisms improved, and companies urged to protect lawful rights such as pay, rest and leave, and occupational safety and health. The use of AI in human resource management is to be regulated, with unlawful acts such as employment discrimination caused by algorithm abuse, false recruitment and privacy or rest-right violations addressed according to law.

Social security rules are to become more flexible and inclusive. Flexible workers and new forms of employment are encouraged to join urban employee basic pension insurance, and the pilot for occupational injury protection for new employment forms is to be expanded.

Income, Monitoring and Service Delivery

Companies are guided to build pay systems suited to AI professionals, improve incentives for high-level talent based on knowledge value, and apply the classified minimum wage reference guide for skilled workers. The policy also encourages investment in public-interest AI technology, services and open-source communities.

Government employment services are to become more intelligent. National employment information resources, the national university student employment platform and the “China Employment” public service platform are to be upgraded with better data collection, analysis and targeted services. AI is to be used in policy identification and delivery, policy evaluation, fund management and consultations. The policy also encourages new products such as recruitment models, intelligent interviews and virtual reality training.

Risk monitoring is to be strengthened through cross-departmental data sharing on AI-related industries and employment, regional and industry monitoring models, and early warning systems. Dedicated surveys will track AI penetration, job creation and substitution, and changing skills needs. Research centres on AI and employment are to be developed using existing university and research resources, and national social science fund projects will support forward-looking research on employment and income distribution.

AI-related employment risks are to be included in the mechanism for preventing and resolving large-scale unemployment risks, with contingency plans and joint responses to labour relations risks.

Practical Takeaways for Foreign Founders

• Hiring and restructuring: build AI adoption plans with worker consultation, training and transition support in mind.
• Compliance: review HR algorithms and recruitment practices for discrimination, privacy and rest-time risks.
• Training: consider partnerships with universities and vocational schools, and use public training resources.
• Social insurance: check enrolment rules for flexible and new-form workers as local implementation develops.
• Funding: monitor eligibility for SME digitalisation and employment-stabilisation support measures.

Local governments and relevant departments are responsible for implementing the policy according to local conditions. Human resources and social security departments, together with development and reform departments, are to coordinate implementation. Foreign founders should watch for local rules and implementing notices, as details may vary by region.

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

Foreign founders can contact ChinaMNC on WhatsApp or WeChat at +86 153 1898 8535 for help registering and operating a company in China.