China is enforcing a policy that mandates aggressive AI adoption without resulting in job cuts. Recent court rulings have reinforced this stance, with Beijing's arbitration authority ruling that terminating employees solely due to automation is not valid under China's Labor Contract Law. A company was ordered to pay 791,815 yuan in compensation for such dismissals. Similarly, the Hangzhou Intermediate People’s Court ruled against a company that reduced an employee's pay by 40% and terminated them after partial job automation. Vice Premier He Lifeng has engaged with employers, highlighting that AI could eliminate up to 30% of roles. However, China insists on using AI to create new positions rather than eliminating existing ones. State media and the Ministry of Human Resources have echoed this sentiment, contrasting with Western markets where AI-driven layoffs are more common. Chinese firms demonstrating AI-driven productivity while maintaining headcount may receive favorable regulatory treatment, while those reducing staff face legal risks.