Odd that you mention that, China is afraid of exactly the opposite. Their systems are so centralized for surveillance purposes that an AI seriously breaching their systems could destroy their control.
Of course it is afraid, and because of that AI will be banned for many use cases and severely regulated by the government for other use cases.
That is like one of the first steps to build the ultimate totalitarian regime. In the USSR bolsheviks were grate proponents of civilian weapons right until they have got power. And then civilian weapons were banned.
