Published by ChinaMNC · Shenfang

China’s AI and Employment Policy: What Foreign Founders Should Know

A practical guide for foreign founders in China on the State Council’s 2026 AI and employment policy: new jobs, SME support, training, worker protections, and compliance expectations.

China’s AI and Employment Policy: A Guide for Foreign Founders

China’s State Council has issued a policy opinion on adapting to artificial intelligence development and 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-driven efficiency with job creation, worker protection and social stability. The policy treats employment as the most fundamental livelihood issue and sets an overall direction: use AI to create jobs, upgrade traditional roles, improve job quality and stimulate entrepreneurship, while moderating the displacement effects of AI adoption.

What the Policy Emphasizes

The guiding principles combine employment-first thinking with development-and-security coordination. The stated goal is inclusive development in which technological progress, industrial upgrading, employment promotion and livelihood improvement move together. For founders, this means AI adoption is encouraged, but it is expected to be managed with attention to workforce impact, skills and social risk.

New Opportunities in Emerging AI Fields

The policy calls for deeper implementation of 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 intelligent terminal manufacturing. The policy also supports cultivating AI-native enterprises and specialized, refined, distinctive and innovative “little giant” enterprises. Eligible companies may be included in special loan support for stabilizing and expanding employment, creating more new jobs and opportunities.

Support for SMEs and Startups

An AI SME entrepreneurship support plan is proposed, with open-source ecosystems used to promote innovation among small and medium-sized enterprises. The policy calls for public digital transformation services and for developing “small, fast, light and precise” digital products and solutions. SMEs and individual businesses should be able to use data, algorithms and other intelligent production factors on an equal basis according to law. The aim is to lower the threshold for AI adoption and strengthen the capacity of smaller firms to absorb employment.

Government investment funds, including the national venture capital guidance fund and the national AI industry investment fund, are to support AI enterprise innovation in a market-based manner. High-level open-source AI communities and quality open-source projects are also promoted to generate entrepreneurship and employment effects. The policy endorses entrepreneurship models combining scientific and technological achievements, industrial development, vocational skills and livelihood needs, with support policies and incubation services for AI application and technology transfer projects.

Jobs, Skills and Training

New Occupations and Standards

The policy calls for faster development of new occupations and occupational standards around AI scenarios and large-scale application. Demand should expand for roles such as digital managers, AI engineering technicians and AI trainers. Localities are encouraged to add relevant professional titles for evaluation and to carry out AI-related vocational skill level recognition.

Traditional Industries and Services

AI should help transform traditional industries, with human-machine collaboration promoted in all-factor intelligent industrial development and digital-agricultural upgrading. The policy also envisions AI-driven new service models, extending producer services toward specialization and higher value-chain positions, and promoting higher-quality, diversified and convenient consumer services. New service consumption scenarios such as experience-based and personalized consumption are expected to expand service-sector employment.

Mitigating Displacement

AI should be prioritized in roles with labor shortages or high environmental risk. In labor-intensive industries, the scope, intensity and pace of AI application should be handled prudently to reduce shocks to workers. Companies are encouraged to explore unemployment buffer-period arrangements, giving affected workers advance notice and transition or reassignment support during large-scale AI rollout.

Risk Assessment and Talent Development

A mechanism for assessing the employment impact of AI applications is proposed. Projects in market-access areas that may cause significant employment shocks should undergo employment risk assessment alongside review, with support for transition and reassignment. Other AI application projects should conduct assessments as appropriate.

Universities and vocational schools, including technical schools, are encouraged to adjust disciplines dynamically, make extraordinary arrangements for urgently needed AI disciplines, build interdisciplinary programs, add AI “micro-majors” and implement compound talent programs. School-enterprise joint training is encouraged, with leading technology enterprises participating in curriculum development, teacher training and teaching facilities. AI education is to be advanced across all stages, with students doing practical work in enterprises and engineers teaching in schools.

A special AI training plan is proposed under the “Skills Light Up the Future” training action. Local project-based and order-based digital skills training should closely follow AI market demand, encouraging college graduates, young people, migrant workers and unemployed persons to join AI employment and entrepreneurship training. Public training bases, enterprise training bases and high-skilled talent training bases should offer AI skills training. Public-benefit courses are to be expanded through national smart education and continuing-education platforms, and AI skills competitions are encouraged within existing vocational skills contests.

Public Services, Worker Protection and Monitoring

The policy calls for smarter policy implementation, including intelligent identification of service recipients and targeted delivery of employment policies. National employment information resources, the national college student employment service platform and the “China Employment” public service platform are to be upgraded with better data aggregation, analysis and precision services. AI application pilot bases are to be built, grassroots public employment services upgraded, and AI used in labor dispute mediation and arbitration. Human resources services should adopt AI, with employers encouraged to innovate job-search models, intelligent interviews and virtual-reality training.

Workers affected by AI-related displacement should receive employment assistance, career guidance, skills training, job referrals and entrepreneurship support as appropriate. Eligible insured unemployed persons should receive unemployment insurance benefits promptly and in full. The policy calls for research on protecting workers’ basic rights under human-machine collaboration, improved consultation and coordination mechanisms, and supervision of employers’ legal obligations on pay, rest and leave, and occupational safety and health. AI use in human resource management should be regulated, and illegal acts such as employment discrimination caused by algorithm abuse, false recruitment, and infringement of privacy or rest rights should be addressed according to law.

Social security should become more flexible and inclusive, with support for flexible workers and new-form employment workers to join urban employee basic pension insurance and expansion of occupational injury protection pilots. The policy also calls for income distribution mechanisms suited to AI, guidance for enterprises to adopt pay systems fitting AI practitioners, and incentives for high-level talent pay linked to knowledge value. Enterprises are encouraged to invest more in public-interest AI technology, services and open-source communities.

Employment risk monitoring and early warning should be strengthened through cross-departmental data sharing and regional and industry-specific intelligent monitoring models. Special surveys should track AI penetration, job creation and substitution, and skills demand changes. Research centers on AI and employment are to be developed using universities and research institutions, with forward-looking research on AI’s impact on employment and income distribution. AI-related employment risks should be included in mechanisms for preventing and resolving large-scale unemployment risks, with contingency plans and joint handling of labor relations risks.

Practical Takeaways for Foreign Founders

• Frame AI adoption around job creation, skills upgrading and worker transition, not only cost reduction.
• Check whether your company or projects may qualify for SME, entrepreneurship, training or employment-related support programs.
• If you deploy AI in labor-intensive or market-access settings, prepare for employment impact assessment and consultation expectations.
• Invest in AI skills training and school-enterprise cooperation, and use public training and education platforms where relevant.
• Review HR algorithms and recruitment practices for discrimination, privacy and rest-right risks, and maintain lawful pay, leave and safety protections.
• Monitor employment risk data and labor relations developments, and keep transition plans ready for affected roles.

Local human resources and social security departments and development and reform departments are tasked with coordination and implementation, while local authorities are expected to adapt the policy to their circumstances. Foreign founders should watch for local implementing rules and program details.

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