China accuses the United States of AI hegemonism and vows countermeasures

China's Ministry of Commerce on Monday, 27 July 2026, accused the United States of hegemonism in artificial intelligence and warned that Beijing would take countermeasures against any action that causes material harm to its interests.

The response came after senior US officials said Chinese AI companies could face investigations, sanctions and trade restrictions over the alleged theft of American technology. A ministry spokesperson said Washington was threatening Chinese firms on the basis of claims that they used distillation to copy advanced US models, without factual or legal grounds. Distillation is a widely used AI training technique in which the outputs of a more capable model are used to train another system.

According to Reuters, US Treasury Secretary Scott Bessent subsequently warned that Chinese companies could face financial sanctions or placement on the Commerce Department's Entity List, which restricts access to American technology.