Chinese courts ruled on April 30 that companies cannot fire workers simply to replace them with AI, with the Hangzhou Intermediate Court upholding a case where an employee's salary was cut 40% due to AI automation and their subsequent dismissal was deemed illegal. The ruling establishes that under Chinese labor law, AI adoption is a strategic business choice—not an unforeseeable circumstance—so companies must retrain or redeploy workers rather than terminate them for cost savings. This precedent matters because it creates legal protection for workers as automation accelerates across China's tech sector, forcing companies to budget for transitions instead of simply cutting payroll. A second case from Beijing in December 2025 followed the same principle, ruling that AI job elimination counts as a deliberate strategy, shifting the risk from workers to employers.