China Tightens AI Policy to Curb Tech Bubbles and Keep AI Risks in Check

China AI Policy Introduces Stringent Oversight Framework

China unveiled sweeping policy guidelines on Friday that tighten oversight of its push into advanced technologies, with a dual focus on curbing tech bubbles while ensuring AI remains safe, reliable, and controllable1

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. The directives, issued jointly by the ruling Communist Party and the cabinet, establish technology monitoring, risk warning systems, and emergency response mechanisms to manage AI risks2

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. As Beijing accelerates its drive toward technological self-sufficiency amid intensifying US rivalry, the guidelines warn against blind investment and excessive expansion into emerging sectors1

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New Productive Forces Framework Balances Innovation and Control

The China AI policy centers on President Xi Jinping's concept of "new productive forces," introduced in 2023 to emphasize scientific research, technological breakthroughs, and industrial upgrading across the manufacturing base1

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. According to Xinhua, developing new productive forces represents "an inherent requirement and an important focus for promoting high-quality development"1

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. The guidelines mandate breakthroughs in AI theory and core technologies while strengthening the supply of computing power, algorithms, and data1

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. Officials will establish national pilot bases for industrial AI applications to accelerate deployment across strategic sectors.

AI Plus Initiative Targets Industrial Transformation

China will fully implement its AI Plus initiative to upgrade traditional industries and fast-track the rollout of intelligent products including connected new-energy vehicles, AI-enabled phones and computers, and humanoid robots1

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. The policy pledges to strengthen "original and disruptive" innovation in core technologies, leveraging China's state-led "new nationwide system" to speed development and deployment of landmark products1

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. This approach reflects Beijing's strategy to reduce dependence on foreign technology while building domestic capabilities in critical sectors.

Strict Accountability Measures Target Investment Bubbles

The guidelines impose strict accountability on officials responsible for major losses caused by blind investment in high-tech sectors2

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. Authorities were instructed to prioritize the real economy and avoid industrial hollowing-out and "swarm-like" rushes into advanced technologies1

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. The policy strictly prohibits "illegal or improper abuse of policies in the name of developing new productive forces," signaling Beijing's determination to prevent speculative excesses that could destabilize strategic industries1

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Low-Altitude Economy Gains Strategic Priority

The document calls for healthy and orderly development of the low-altitude economy, encompassing businesses built around civilian drones, air taxis, small aircraft, and related services, while ensuring safety1

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. This sector represents another frontier where China seeks to establish leadership in emerging technologies. The dual emphasis on innovation and risk management reflects Beijing's broader strategy to balance rapid technological advancement with stability and control, particularly as competition with the United States intensifies over AI supremacy and semiconductor independence.