Dr. Mei Gechlik

I was fortunate to host Dr. Mei Gechlik, Founder & CEO of SINOTALKS®, as a panelist of the Artificial Intelligence Regulation: A Global Landscape event to help us understand Artificial Intelligence Regulation in China. In addition, Dr. Gechlik discussed the implications of AI regulation for the private sector.

Here is a summary of Dr. Gechlik’s contributions:

  • AI Regulation in China must be analyzed within the broader context of the Chinese legal system, while understanding that China’s national standards can also be affected by international standards, as reflected in China’s own document titled “Global AI Governance Initiative”.
  • Some local rules in China (e.g., those in Shanghai) allow authorities to exempt “minor violations of law” from administrative penalties, in the hope of giving legislators more time to carefully shape AI rules without compromising the development of AI.  Yet, individuals seeking protection of their legal rights cannot wait, as exemplified by the emergence of multiple IP-related lawsuits inside and outside China.  Thus, the sooner AI regulatory frameworks are in place, the better.

On the Global AI Governance initiative:

In October 2023, China issued a document titled Global AI Governance Initiative. In this document, the Chinese Government proposes to the rest of the world basic principles that should be followed by stakeholders promoting AI Governance initiatives.  These principles include, among others, the following:

  • Respect for other countries’ national sovereignty and a strict adherence to their laws.
  • All countries must adhere to the principle of developing AI for good and respect relevant international laws.

The above two principles suggest that international AI rules will impact China’s AI rules and vice versa.

On China’s Regulation of AI at the National Level:

In August 2023, the Cyberspace Administration of China and six other ministries/commissions issued the Interim Measures for the Administration of Generative AI Services to, inter alia, set standards for providers and users of Generative AI services.

Notable observations on this document:

  • It is short (i.e., 24 articles) … but not simple.
  • It has a broad coverage.
  • Terms used are very broad and left for interpretation (e.g., social morality, ethics, etc.)
  • Many other laws in China are relevant, including those that are explicitly mentioned (e.g., Cybersecurity Law, Data Security Law, Personal Information Protection Law, and Science and Technology Progress Law) and those that are not (e.g., all laws related to intellectual property rights and the Antimonopoly Law)
  • Other rules passed or to be passed as well as judicial cases —whose importance has grown significantly since 2011 despite China’s being a country that primarily uses legislation— are very important

China’s “Guiding Cases”:

  • They are de facto binding cases issued by the Supreme People’s Court of China since 2011 for the purpose of accomplishing this explicit goal: uniform application of law across China.
  • These cases are carefully named “Guiding Cases” (vs. “binding cases”) and clearly identified as NOT a “source of Chinese law” to avoid any misunderstanding that China is developing a “case law” system that is like those in Anglo-American legal systems
  • Yet, these cases have exceptional significance because Chinese judges handling cases similar to Guiding Cases are expected to apply legal principles established in Guiding Cases.  In addition, China is building a public database containing Guiding Cases and other exemplary cases.  Judges must use this database to search for similar cases before rendering judgments of pending cases.  The database will become a significant source of judicial cases shedding light on important legal issues related to AI legislation

On China’s Regulation of AI at the Local Level:

Shanghai, a provincial-level municipality, and two cities in Guangdong Province, i.e., Guangzhou and Shenzhen, have taken the lead to issue pilot local AI rules to encourage more investment in the AI sector.  Their experiences could serve as a blueprint for other regions in China.

E.g., Regulation of Shanghai Municipality on Promoting the Development of Artificial Intelligence Industries

Article 65

Currently, the regulation says that municipal authorities can make a list of minor violations of law and these violations are legally exempt from administrative penalties.  Authorities will resort to education through criticism and guidance through interviews to guide the production and business activities related to AI.

Note: There is still a great deal of hesitation on how to regulate AI without compromising its development, especially because AI is a new field with uncertainty and perceived risks.

On the Digital Economy Partnership Agreement (DEPA):

  • Because of its strong interest in digital trade, China is actively seeking to join the DEPA, the founding members of which are Chile, New Zealand, and Singapore.
  • With standards related to data security and privacy, the DEPA could be a good mechanism to encourage China to abide by DEPA standards that also have implications for international regulation of AI.

On the Implications of AI Regulation for the Private Sector

Global Competition

The private sector is pragmatic: It will compare and choose jurisdictions with regulatory frameworks that have lower thresholds.

E.g., The EU AI Act might be seen as setting remarkably high, albeit important, standards that could deter investment. Other jurisdictions might set lower standards and be in better positions to attract foreign investment.

Innovation in an uncertain regulatory environment

  • China is undertaking an incremental strategy by engaging different stakeholders including foreigners and releasing rules progressively.
  • It is important to stay informed of China’s judicial rulings as landmark cases will help shape China’s regulation of AI.

The views expressed in this article are those of Dr. Mei Gechlik.

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