China calls for caution in replacing employees with AI to avoid unemployment

China has urged companies to exercise caution when replacing workers with artificial intelligence (AI) to mitigate unemployment risks. The government proposed gradual AI integration in labor-intensive sectors, prior notification to affected employees, and support for reskilling. The guidelines, consisting of 18 measures, acknowledge the potential job displacement due to automation and recommend assessing employment impacts, including alert mechanisms for large-scale unemployment scenarios. Experts highlighted the lag of labor laws behind technology, raising concerns about algorithmic management issues. The guidelines also address algorithmic discrimination in hiring and privacy violations, although they lack binding obligations for companies. China's push for AI comes amid a rapid expansion of generative AI users, exceeding 700 million in early 2026, as part of efforts to sustain employment and enhance technological modernization amid competition with the U.S.