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China Formalizes Its AI Governance Strategy Through New International Institution
On July 17, 2025, Xi Jinping delivered the keynote address at the World Artificial Intelligence Conference in Shanghai—his first in-person appearance at the event since its inception in 2018. The timing and prominence of his attendance signaled Beijing’s intensifying commitment to shaping the global governance architecture for artificial intelligence. Yet the most consequential announcement came a day earlier, on July 16, when 29 countries formally established the World Artificial Intelligence Cooperation Organization (WAICO), headquartered in Shanghai. This institutional development represents a critical inflection point in the competition over AI governance standards and reveals Beijing’s strategic pivot from articulating abstract principles to building permanent, operationalized institutions capable of normalizing China’s approach to digital regulation globally.
From Principles to Institutions: China’s Institutional Strategy
China’s engagement with global AI governance has evolved significantly over the past two years. In 2023, Beijing released its Global AI Governance Initiative, establishing a set of rhetorical commitments to multilateral cooperation. Premier Li Qiang first proposed a China-led international AI organization at the 2025 World AI Conference, and the concept was formally embedded in China’s Five-Year Plan (2026-2030), adopted in March 2025. WAICO represents the operationalization of these ambitions—a shift from principle-setting to institution-building.
The strategic significance of this institutional approach should not be underestimated. International organizations do not derive influence merely from the ideas they articulate; rather, they shape global norms through concrete mechanisms: convening governments, training officials, developing technical standards, coordinating research, and establishing durable professional networks. These mechanisms gradually normalize particular approaches as international best practice. China’s strategy does not require WAICO to supersede existing forums like the OECD or UN bodies; rather, Beijing needs WAICO to become a sufficiently influential venue where member states collectively normalize China’s governance model, which they then actively promote in other, more established international fora.
The Founding Coalition: Geographic Reach and Strategic Intent
The 29 founding members of WAICO reveal deliberate geographic targeting. The membership breaks down as follows:
- Africa: Algeria, Cameroon, Congo, Ethiopia, Kenya, Lesotho, Mozambique, Senegal, and South Africa (9 countries)
- Middle East: Oman (1 country)
- Asia-Pacific: Cambodia, China, Indonesia, Kazakhstan, Kyrgyzstan, Laos, Malaysia, Myanmar, Pakistan, and Tajikistan (10 countries)
- Europe: Belarus, Russia, and Serbia (3 countries)
- Latin America: Brazil, Cuba, Nicaragua, and Venezuela (4 countries)
This composition is not incidental. The overwhelming majority of founding members—particularly those from Africa, Southeast Asia, and Central Asia—already participate in China’s Digital Silk Road, Belt and Road Initiative (BRI), or broader bilateral digital cooperation programs. Countries like Cambodia, Laos, Myanmar, and Pakistan have been early adopters of Chinese digital surveillance technologies and governance frameworks. This pre-existing institutional overlap means WAICO operates within an ecosystem where Chinese technological and regulatory influence is already embedded, significantly reducing the organizational friction required to operationalize Beijing’s preferred standards.
The inclusion of Russia, Belarus, and Serbia is equally strategic. These countries face international isolation on cybersecurity and digital governance issues and view alignment with China as a counterweight to Western-led technical standards organizations. Their participation signals that WAICO functions partly as a coalition of countries seeking alternatives to Western-dominated institutions.
The Governance Model: “Cyber Sovereignty” and Digital Authoritarianism
Xi Jinping framed WAICO’s establishment as China’s response to “the call of the Global South” and as a mechanism to “unite the international community together to vigorously promote AI development and governance.” This language invokes Beijing’s earlier rhetorical framework of “a shared future in cyberspace,” which normalizes the concept of “cyber sovereignty.”
Cyber sovereignty, as articulated by Beijing, posits that the digital domain is a natural extension of state sovereignty and that digital governance should remain the exclusive prerogative of governments, unencumbered by international human rights obligations, multistakeholder accountability mechanisms, or independent oversight. This principle directly contradicts the multistakeholder governance model championed by Western democracies and embedded in institutions like the Internet Governance Forum (IGF) and ICANN.
The risk is substantial: WAICO risks extending cyber sovereignty principles into AI governance, effectively dislodging human rights safeguards, transparency requirements, and accountability mechanisms from the emerging international AI order. A state-centric AI governance model centered on government authority rather than multistakeholder institutions would fundamentally alter the normative landscape in which AI systems are developed and deployed across participating countries.
Embedding Chinese Standards Through Development Assistance and Technical Cooperation
Xi’s keynote outlined specific capacity-building initiatives designed to embed Chinese technological and regulatory approaches within partner countries’ AI ecosystems. Over the next five years, China pledged to:
- Provide 5,000 AI training opportunities for developing countries
- Establish AI cooperation centers with ASEAN, the African Union, the League of Arab States, the Community of Latin American and Caribbean States, the Shanghai Cooperation Organization, and BRICS
- Invite 30 countries to integrate China’s MAZU AI-powered meteorological warning system into their national infrastructure
These initiatives operate on multiple strategic levels simultaneously. On the surface, they constitute development assistance aligned with Beijing’s broader Global South outreach. Substantively, however, they function as mechanisms for embedding Chinese technologies, regulatory standards, and AI models into partner countries’ digital infrastructure. When a country adopts MAZU or participates in a China-led AI cooperation center, it is not merely receiving technical assistance; it is integrating Chinese-developed systems into critical national infrastructure and normalizing Chinese technical standards as the baseline for AI governance.
This approach reflects Beijing’s strategic reorientation toward AI as infrastructure rather than discrete applications. Rather than exporting individual AI tools or software, China increasingly seeks to provide integrated ecosystems comprising models, services, computing resources, standards, training, and digital public infrastructure. This ecosystem approach creates path dependency: once a country’s AI infrastructure is built around Chinese systems and standards, transitioning to alternative architectures becomes organizationally and technically costly.
Open-Source AI as Strategic Instrument
Xi’s keynote reiterated China’s support for open-source AI development, a position often presented in Western discourse as a democratizing force. However, open-source AI serves distinct strategic purposes for Beijing: it accelerates the global adoption of Chinese AI models and tools by reducing barriers to entry and positioning Chinese systems as interoperable with international standards.
This strategic intent became apparent when Moonshot AI, one of China’s “six AI Tigers” (leading commercial AI companies), released its latest open-source model, Kimi K3, timed to coincide with Xi’s remarks. Moonshot claims Kimi K3 performs comparably to leading models from OpenAI and Anthropic on key benchmark tasks. The timing and coordination between Xi’s diplomatic messaging and Moonshot’s commercial product release illustrate how China’s commercial AI ecosystem increasingly complements its institutional diplomacy. Through WAICO partnerships, this synergy will likely intensify, with Chinese commercial AI firms gaining preferential access to the 29 member states’ markets and regulatory frameworks.
Strategic Outlook: Implications for Global AI Governance
WAICO’s success is not predetermined. The organization remains more aspirational than operationalized at present, and it faces structural limitations: it lacks the technical expertise networks of established bodies like the OECD’s AI Policy Observatory or the legitimacy of UN-affiliated processes. However, the organization’s potential impact should not be underestimated.
International norms do not crystallize through single declarations or summits; they accumulate through the patient construction of institutions, technical standards, professional networks, and training regimes. WAICO provides Beijing with a dedicated institutional venue for this norm-diffusion process. Even if WAICO never becomes the preeminent global AI governance body, it can succeed by becoming a significant regional and Global South institution from which member states then advocate China’s preferred standards in other forums.
The critical concern is not whether WAICO will replace existing institutions, but whether it will gradually entrench a state-centric, surveillance-compatible model of AI governance among a coalition of countries representing over 2 billion people. If successful, this would create a bifurcated global AI governance landscape: one regime emphasizing multistakeholder accountability and human rights protections (championed by Western democracies) and another prioritizing state authority and cyber sovereignty (championed by Beijing through WAICO). Such fragmentation would undermine the development of universal AI safety standards, interoperability requirements, and human rights safeguards.
For Indo-Pacific policymakers, particularly in Australia and allied democracies, the emergence of WAICO demands sustained analytical attention. The organization’s evolution, membership expansion, and capacity-building outcomes will reveal whether Beijing’s institutional strategy is successfully reshaping the normative foundations of global AI governance. The stakes extend beyond technical standards; they concern the fundamental question of whether emerging AI systems will be governed through frameworks prioritizing human rights and democratic accountability or through frameworks prioritizing state control and surveillance capacity.
