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

A practical guide for foreign founders on China's State Council policy for adapting to AI development and building an employment-friendly economy, covering hiring, training, enterprise support and compliance considerations.

Why This Policy Matters for Foreign Founders

The State Council General Office has issued a policy opinion on adapting to artificial intelligence development while building an employment-friendly development model. For foreign founders registering or operating a company in China, the document signals how regulators intend to balance AI adoption with job protection. It touches on enterprise support, hiring, training, worker rights and risk monitoring. Understanding these directions helps founders plan hiring, workforce restructuring and compliance in AI-related operations.

Core Direction of the Policy

The policy is framed around high-quality full employment. It calls for using AI to create jobs, upgrade traditional roles, improve job quality and stimulate entrepreneurship, while moderating the job-displacement effects of AI adoption. The stated objective is inclusive development in which technological progress, industrial upgrading, employment promotion and livelihood improvement move together. The document also reiterates the employment-first orientation and the principle of coordinating development with security.

Where New Jobs Are Expected to Emerge

Emerging AI sectors

The policy promotes 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 labeling and intelligent terminal manufacturing. Eligible enterprises may be included in special loan programs supporting financial assistance to enterprises for stabilizing and expanding employment.

Small businesses and startups

An AI entrepreneurship support plan for small and medium-sized enterprises is mentioned, along with open-source ecosystems to foster SME innovation. The policy encourages digital transformation services, lightweight and low-cost digital products, and equal access for SMEs and individual businesses to data, algorithms and other intelligent production factors. Government investment funds, including the national venture capital guidance fund and the national AI industry investment fund, are to support AI enterprises in a market-based manner. Entrepreneurship models combining technological achievements, industrial development, vocational skills and livelihood needs with startup activity are also promoted.

New occupations and traditional sectors

The policy calls for faster development of new occupations and standards, including growing demand for digital management professionals, AI engineering technicians and AI trainers. Localities may add relevant professional title evaluation categories and conduct skill-level certification. In traditional industries, the policy encourages human-machine collaboration in industrial and agricultural digitalization, and expansion of service-sector employment through new service models and consumption scenarios.

Managing Workforce Impact

Founders planning large-scale AI deployment should note the policy's emphasis on caution. AI applications are to be prioritized in roles facing labor shortages or high environmental risk. In labor-intensive industries, the scope, intensity and pace of AI adoption should be handled prudently to limit disruption. Enterprises are encouraged to explore unemployment buffer periods, giving affected workers advance notice and offering transition and reassignment support.

The policy also calls for employment risk assessment for AI application projects. Projects in market access areas that could cause significant employment impact are to undergo employment risk evaluation alongside review, with government departments coordinating transition support. Other AI application projects may conduct assessments as appropriate.

Talent, Training and Public Services

Universities and vocational schools are encouraged to adjust disciplines, expand AI-related majors and micro-programs, and strengthen industry-education cooperation. Enterprises, including leading technology firms, may participate in curriculum development, teacher training and teaching facilities. A dedicated AI training plan encourages training for young people, migrant workers and unemployed persons, supported by public training bases and online learning platforms.

The policy also promotes smarter public employment services: intelligent policy matching, upgraded national employment information resources, the national college student employment platform and the “China Employment” public service platform. It encourages AI-enabled human resources services such as recruitment models, intelligent interviews and virtual reality training.

Worker Rights and Social Protection

For founders managing AI-enabled workplaces, several compliance themes stand out. The policy calls for research on worker rights protection in human-machine collaboration, improved consultation and coordination mechanisms, and enforcement of rights to pay, rest and occupational safety and health. It also requires regulating AI use in human resources management, including addressing algorithmic abuse that causes employment discrimination, false recruitment, or infringement of privacy and rest rights.

Social protection measures include encouraging flexible workers and new employment-form workers to join urban employee basic pension insurance, expanding pilot occupational injury protection, and improving income distribution mechanisms suited to AI-sector workers. Companies are encouraged to invest in public-interest AI technology, services and open-source communities.

Monitoring and Risk Response

The policy calls for cross-department data sharing on AI-related industries and employment, regional and sectoral intelligent monitoring models, and improved early warning of employment risks. It also calls for dedicated surveys on AI's employment impact, research centers on AI and employment, and inclusion of AI-related employment risk in mechanisms for preventing large-scale unemployment. Labor relations risk response is to be strengthened through joint assessment and handling.

Practical Takeaways for Foreign Founders

• Plan AI adoption carefully: expect scrutiny and possible employment risk assessment for projects with significant workforce impact.
• Document workforce transitions: advance notice and transition support for affected workers align with the policy's direction.
• Check eligibility for support programs: SME loans, entrepreneurship support and open-source initiatives may be relevant to your entity.
• Invest in skills: training and school-enterprise cooperation are encouraged, which can help build local AI talent pipelines.
• Review HR algorithms: AI used in recruitment or management should avoid discrimination, false postings and privacy or rest-rights violations.
• Monitor local implementation: human resources and development departments are tasked with coordinating implementation, so local rules may follow.

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 / WeChat at +86 153 1898 8535 for help registering and operating a company in China.