China has unveiled draft regulations aimed at making artificial intelligence technology safer for users, particularly children, as concerns mount globally about AI-related mental health incidents. The Cyberspace Administration of China published these proposed rules, which include comprehensive safety measures designed to prevent AI systems from contributing to suicide and self-harm cases.

Key Safety Measures for Child Protection

The draft regulations introduce several specific protections for minors interacting with AI systems:

Chatbot operators will be required to have human personnel take control of conversations when users discuss topics related to suicide and self-harm, with immediate reporting protocols to guardians or emergency contacts.

Content Restrictions and National Security

The proposed regulations extend beyond child safety to include broader content restrictions. AI firms will be prohibited from generating materials that promote gambling or create content that "endangers national security, damages national honour and interests [or] undermines national unity," according to the regulatory statement.

These comprehensive rules position China among countries actively addressing AI-related mental health crises that have resulted in documented cases of suicide, self-harm, and other serious incidents.

Global Context of AI Safety Concerns

The regulatory initiative comes amid increasing scrutiny of AI-powered chatbots following several high-profile incidents:

• Character.AI Legal Cases: Five separate families have filed lawsuits against Character.AI, alleging that their children's interactions with the chatbot contributed to suicide and self-harm incidents
• OpenAI Legal Challenge: The company faced trial over allegations that ChatGPT encouraged delusions in a case involving the murder of 83-year-old Suzanne Adams by her son Stein-Erik Soelberg, who subsequently died by suicide
• Mental Health Research: Studies have identified potential links between ChatGPT usage and increased feelings of loneliness among users

Erik Soelberg, son of the suicide victim, pressed charges against OpenAI, claiming that ChatGPT reinforced his father's delusions that his mother was plotting against him.

Implementation Timeline

Once finalized and approved, these regulations will be implemented across China, marking a significant step in governmental oversight of AI technology. The comprehensive nature of these proposed rules reflects growing international recognition of the need for structured approaches to AI safety, particularly regarding vulnerable populations like children.

The draft regulations represent China's proactive stance on AI governance, addressing both immediate safety concerns and broader national security considerations as artificial intelligence technology becomes increasingly integrated into daily life.

China has introduced a significant new requirement for its semiconductor industry, mandating that chipmakers use at least 50% domestically made equipment when adding new production capacity. The rule, while not publicly documented, has been communicated to manufacturers seeking state approval for plant construction or expansion in recent months.

Policy Implementation and Requirements

Chipmakers must demonstrate through procurement tenders that at least half their equipment will be Chinese-made to secure government approval. Applications failing to meet this threshold are typically rejected, though authorities provide flexibility depending on supply constraints. The requirements are relaxed for advanced chip production lines where domestically developed equipment is not yet fully available.

Authorities prefer percentages much higher than 50%, with sources indicating the eventual aim is for plants to use 100% domestic equipment. This mandate represents one of the most significant measures Beijing has introduced to reduce dependence on foreign technology, particularly following US export restrictions implemented in 2023.

Strategic Context and Government Support

President Xi Jinping has called for a "whole nation" effort to build a fully self-sufficient domestic semiconductor supply chain, involving thousands of engineers and scientists at companies and research centers nationwide. This comprehensive approach spans the entire supply-chain spectrum, with Chinese scientists working on prototypes of machines capable of producing cutting-edge chips.

To support the local chip supply chain, Beijing has invested hundreds of billions of yuan through the "Big Fund," which established a third phase in 2024 with 344 billion yuan ($49.00 billion) in capital. State-affiliated entities placed a record 421 orders for domestic lithography machines and parts this year, worth around 850 million yuan, signaling surging demand for locally developed technologies.

Market Impact and Industry Transformation

The policy is already yielding significant results in critical manufacturing areas. Before the 2023 US export restrictions, domestic fabrication facilities like Semiconductor Manufacturing International Corporation (SMIC) preferred US equipment and rarely gave Chinese firms opportunities. However, the restrictions forced Chinese fabs to work with domestic suppliers.

Key Performance Indicators

Technological Advancement and Market Share Gains

China's largest chip equipment group, Naura, is testing its etching tools on SMIC's cutting-edge 7nm production line, following successful deployment on 14nm processes. This represents rapid advancement in etching technology, a critical chip manufacturing step involving material removal from silicon wafers to create transistor patterns.

Naura has become a key partner for Chinese memory chipmakers, supplying etching tools for advanced chips with more than 300 layers. The company developed electrostatic chucks to replace worn parts in Lam Research equipment that could no longer be serviced after 2023 restrictions.

Competitive Landscape Shifts

Analysts estimate China has reached approximately 50% self-sufficiency in photoresist-removal and cleaning equipment, a market previously dominated by Japanese firms but now locally led by Naura. Advanced etching tools, once predominantly supplied by foreign firms such as Lam Research and Tokyo Electron, are being partially replaced by Naura and Advanced Micro-Fabrication Equipment.

The domestic equipment market is expected to be dominated by two to three major manufacturers, with Naura positioned as a definitive leader. This transformation is viewed with concern by global competitors as foreign suppliers face displacement from the Chinese market, while domestic firms rapidly improve their capabilities through accelerated government requirements.