According to the Wall Street Journal, China is establishing an increasingly clear policy framework: companies are encouraged to actively adopt artificial intelligence, but directly laying off workers using AI replacement as a reason is considered unacceptable. Vice Premier He Lifeng recently held direct talks with several corporate executives, during which a striking statistic emerged — if AI is fully deployed across Chinese companies, up to 30% of current jobs could disappear; Beijing’s response is not to slow AI adoption, but to require companies to convert the efficiency gains from automation into new positions, rather than simply cutting old ones. In March of this year, Xinhua News Agency published a commentary article, clearly stating that equating AI with layoffs both harms corporate competitiveness and undermines employee trust; regulators are also drafting new rules to codify these requirements into law. On the legal front, two court rulings have backed the policy: an arbitration body in Beijing ruled last December that dismissing employees on the grounds of job automation does not constitute a legal dismissal under the Labor Contract Law, ordering the employer to pay compensation of 791,800 yuan; on April 30, the Hangzhou Intermediate People’s Court upheld a similar ruling, determining that AI job replacement does not constitute a „significant change in objective circumstances“, and the case was deliberately scheduled just before Labor Day to send a clear signal.
This policy framework stands in stark contrast to the West: in the first four months of 2026, global tech companies laid off over 78,000 people, with nearly half directly attributed to AI. Companies such as Meta, Oracle, and Block have publicly cited AI efficiency gains as a reason for layoffs, and neither the United States nor the European Union currently has equivalent legal protections. While accelerating AI industrialization, the Chinese government is simultaneously pushing for job security — a move driven both by stability concerns and by the fact that the Government Work Report adopted by the State Council this year listed „responding to AI’s impact on employment“ as a policy goal for the first time. However, analysts point out that the „no layoffs“ requirement may increase corporate labor costs, putting additional pressure on small and medium-sized enterprises amid an economic slowdown; the actual enforcement of the policy still remains to be seen.