Abstract
This paper examines China’s evolving AI regulation, focusing on the interplay between fragmented laws, technical standards, and sectoral governance frameworks. Case studies on autonomous driving and financial AI demonstrate how adaptive regulatory models balance innovation with risk management via pilot projects, stringent data protection, and iterative policy evolution. These models transition from localized experiments to national standards, managing risks through data governance and public safety measures. Analyzing legislative proposals like the Model Artificial Intelligence Law (MAIL) and the Artificial Intelligence Law of P.R. China (Scholarly Draft Proposal), this paper contrasts MAIL’s centralized, precautionary framework with the Scholarly Draft’s flexible, tiered system that promotes innovation through differentiated risk management. This reflects the tension between central regulatory control and sector-specific governance in aligning rapid technological advancement with coherent legislative oversight. The paper argues that a phased legislative strategy emphasizing flexibility, cross-sectoral consistency, and proactive engagement with emerging technologies is essential for China to sustain global competitiveness while ensuring ethical and safe AI development. By integrating local experimentation, sectoral adaptation, and incremental national standardization, it advocates for balancing regulatory oversight with technological innovation. Ultimately, the findings reflect China’s efforts to craft a resilient legal framework that mitigates AI risks while fostering sustained and responsible innovation.