European and U.S. privacy laws may prevent medical technology companies from accessing the health records of 1.4 billion people in China to create algorithms that could analyze and predict human health conditions, tech and health-care professionals say.

China in April launched the pilot stage of its Personal Information Security Specification, which allows the government to collect data in personal, medical, and hospital records for research or “public interest” purposes. The data would be funneled into a nationwide database, now at 1 million records, to train AI algorithms.

The project could create “the most powerful AI platform in the world,” said...