Partner
Attorney at Law (Germany)
New AI Regulation in China 2026: Overview and Practical Implications
- China is fleshing out the legal framework for the use of AI
- New guidelines provide guidance for businesses and the financial sector
- Governance, liability and compliance are coming increasingly into focus
- Companies should review their AI processes and controls
China is significantly clarifying the regulatory framework for the use of Artificial Intelligence. The Supreme People’s Court’s guideline on the handling of AI disputes provide, for the first time, a comprehensive framework for the judicial assessment of AI-related matters.
In addition, the NFRA guidelines for banks and insurance companies, as well as the Shanghai Bar Association’s practical guidelines, set out specific requirements for individual sectors. For companies, the question is therefore not whether AI can be used, but how it should be deployed responsibly and in compliance with regulations.
Part 1: New Guidelines from the Supreme People’s Court
An overview of the new judicial guideline and its implications for liability, data protection, intellectual property and the taking of evidence.
Part 2: Practical Guidelines of the Shanghai Bar Association
The three key principles – confidentiality, human oversight and due care – as a potential framework for the use of AI in companies.
Part 3: New NFRA Guidelines for the Financial Sector
Binding requirements regarding governance, risk management and human oversight for AI applications in the banking and insurance sectors.
Why this is relevant for international companies
The Supreme People’s Court’s guideline convey a clear fundamental message: AI is a tool and must be treated as such. Companies remain responsible both for the information fed into AI systems and for the results generated. The new requirements do not necessarily call for the introduction of an entirely new compliance system. Rather, the key is to manage the use of AI in a transparent manner, to control risks appropriately and to adapt existing governance structures accordingly. The guidelines for financial institutions, as well as the practical guidelines issued by the Shanghai Bar Association, can serve as a guide for developing in-house AI governance and control mechanisms.
In summary
- Governance: New requirements for the responsible use of AI in China.
- Liability: Companies remain responsible for the data entered and the results generated.
- Compliance: Financial and legal guidelines provide practical templates for internal control mechanisms.
- Legal certainty: The new guidelines outline how courts and regulatory authorities will assess AI applications in future.