As of 2026, the blurring of digital reality has reached a critical point. The proliferation of AI- generated content (AIGC) is widely seen as threatening our ability to agree on basic facts and what is real or true. In response, a wave of regulations around the world has emerged in recent years. However, implementing these regulations faces some major challenges, including regulatory ambiguities, technical limitations, and cross-border interoperability. This policy report compares the regulatory approaches and implementation challenges in the EU and China, the two primary frontiers for AI governance.