China Rejects U.S. Claims That Its AI Firms Illicitly Distilled American Models

China has publicly dismissed accusations that its leading artificial intelligence developers illegally extracted technology from U.S. frontier models, calling the allegations "misguided and counterproductive" and framing them as an exaggeration of routine competition. Speaking at the World AI Conference in Shanghai on July 18, 2026, Chinese assistant foreign minister Liu Bin said certain countries had overstated the role of model distillation, marking Beijing's most direct rebuttal yet in an escalating dispute over how China's AI sector has closed the gap with the United States.