The Chinese legal system is grappling with a surge of artificial intelligence cases, but experts have warned that the lack of a unified legislative framework is hampering efforts to tackle the problem.

In a recent landmark case, a court in the eastern city of Hangzhou ruled against a tech company that had fired one of its workers after he refused to accept a demotion and pay cut, with the company telling him he could be replaced by AI.

The worker had been employed by a fintech firm to evaluate the accuracy of answers generated by AI models.

The court said replacing the worker, surnamed Zhou, on cost grounds did not constitute a “material change in objective circumstances” – a legal requirement for firing him.

The Hangzhou Intermediate People’s Court said its judgment should be seen as an “exemplary case” that could guide future rulings.

“The use of AI technology is intended to free labourers, improve productivity and serve the public good,” the court said. “Businesses cannot shift the financial burden and risks associated with the technological change onto their employees.”