For Beijing, managing AI requires walking a razor’s edge: seal off domestic internet users from foreign influence, but keep China’s top developers linked to the global cutting edge. When Chinese regulators blocked U.S.-based open-source hub Hugging Face in 2023, it opened a market for domestic alternatives —  even as the government quietly tolerates artificial intelligence labs bypassing the block to share Chinese models with the world. In the AI era, China is developing an independent ecosystem...