Since ChatGPT's debut and the rise of DeepSeek for deep reasoning, generative AI tools has become essential for business operations. More and more companies are increasingly embracing AI, albeit cautiously, by permitting workplace use, purchasing enterprise AI subscriptions and creating corporate AI accounts for employees, with the aim of bringing employee AI usage under corporate risk management. When European multinationals, particularly their Chinese subsidiaries, permit employees to use China-based generative AI tools like DeepSeek, Kimi, or Doubao, what legal regimes might apply? This article examines the legal landscapes both in China and the EU from two lenses: AI governance and personal data protection. It addresses a pressing concern for such businesses: which Chinese/EU regulations apply, and how extensive are the compliance obligations?

Since the implementation of the Personal Information Protection Law of the People’s Republic of China and its supporting regulations, a growing number of multinational enterprises have focused on the compliance of cross-border data transfers. Under the applicable laws, when a personal information processor provides personal information overseas, unless an exemption applies, it must follow one of the following three statutory pathways to ensure lawful and compliant data transfers: passing a security assessment organized by the Cyberspace Administration, obtaining personal information protection certification, or completing the cross-border data transfer standard contract filing.

Quality-related disputes are among the most common conflicts arising from sales contracts. They affect both large-scale industrial plants and smaller household appliances. In disputes between manufacturers and consumers over the quality of household appliances, the amount in dispute is often relatively small, so manufacturers usually decide to resolve the dispute by taking back the goods and issuing a refund. In connection with the procurement of large-scale industrial equipment, however, quality-related disputes can readily reach an economic volume of millions. In addition, such disputes are often linked to other issues such as payment of the remaining purchase price or the contractually agreed final inspection and acceptance of the equipment, which further complicates the case.