China evolving into AI 'super market' driven by scale, innovation

BEIJING - The topic of artificial intelligence (AI) has stood out at meetings and press conferences during China's annual two sessions, painting a broader picture: China is rapidly evolving into an AI "super market," with the application of frontier technology woven into the fabric of a wide range of sectors in its economy.

Vowing to advance the AI Plus initiative, a government work report submitted Wednesday at the national legislature session pledges to support the extensive application of large-scale AI models and to vigorously develop new-generation intelligent terminals and smart manufacturing equipment, including intelligent connected new-energy vehicles, AI-enabled phones and computers, and intelligent robots.

Passionate discussions on AI among lawmakers and political advisors present a panorama of innovative applications -- from algorithmic script generation for short films to precision agricultural weeding and robotic manufacturing -- that vividly illustrate how scale and innovation come together to propel the integration of technology into the industrial and everyday contexts.

AI-driven transformation

At an industrial park in Shenzhen's Pingshan district, industrial AI models analyze data streams from over 2,000 devices, enabling production lines to optimize technological parameters autonomously nearly 30 times an hour.

This example of manufacturing represents just one facet of China's broader push for AI integration. In the automotive sector, He Xiaopeng, chairman of Chinese auto brand Xpeng and a national lawmaker, believes a transformative AI era is approaching, and that it will bring two significant changes.

"First, AI will accelerate the arrival of autonomous driving, and even driverless vehicles. Second, the automotive industry is beginning to merge with robotics," he told reporters during a group interview on Saturday.

In 2024, China's new energy vehicle production and sales volumes both surpassed 12 million units, maintaining the world's leading position for a 10th consecutive year.

AI Plus will emerge as a critical strategic opportunity for China's automotive industry, simultaneously driving a new wave of development in large language models, intelligent connected electric vehicles, and smart robotics, said Zhang Yongwei from China EV100, a non-governmental research and policy institute.

Data indicates that by 2024, nearly 200 generative AI models had been registered and launched for service in China, with over 600 million registered users. The country's industrial robot installations now account for more than half of the global total, and China is leading the development of international standards for elderly care robots.

Industry observers point to DeepSeek, a powerful new large language model, as a catalyst that could accelerate China's AI adoption. DeepSeek demonstrates that cost-effective computing power can achieve remarkable feats, said Tian Feng, head of an AI think tank.

Tian predicts that in the next one to two years, small and medium-sized enterprises will actively adopt AI applications, and large enterprises will develop industry-specific models using open-source frameworks.

"We are nearing a tipping point in AI Plus," he said.

From labs to industries

China is home to over 1.4 billion people and 1.1 billion internet users, its manufacturing sector has maintained its global lead for 14 consecutive years, and the country has hosted the highest number of global top-100 tech clusters for two consecutive years. China's world-leading market scale, industrial prowess and thriving innovation ecosystem underpin its capacity to develop prototypes and scale technologies rapidly.

Consumers are increasingly experiencing the tangible benefits of AI Plus through products like intelligent cars that understand user intentions and helpful chatbots that effectively solve problems. The industry's proactive approach to adopting AI in various scenarios is creating a feedback loop that drives AI technology from research labs into the industrial arena.

"The best is yet to come," Kai-Fu Lee, CEO of 01.AI and chairman of Sinovation Ventures, said in an interview with People's Daily. China clearly shines in technology, building applications that cater to user needs and create economic value, he said.

The pharmaceutical industry has long been plagued by a problem: developing a new drug can take 10 years and $1 billion. AI is now expected to break this cycle.

Experts predict that in the next three to five years, China's AI-supported drug research will enter a phase of rapid development, with AI technologies taking on comprehensive research tasks such as molecular optimization, synthetic route design, as well as automatic generation, analysis and screening.

Chen Kaixian, an academician of the Chinese Academy of Sciences, has said that AI could generate up to $1.2 trillion in value for the pharmaceutical industry.

"We look forward to the first AI-assisted drug receiving regulatory approval as soon as possible," said Xi Jianzhong from the College of Future Technology at Peking University.

The AI Plus initiative aligns with China's broader strategy to develop new quality productive forces as a new engine for growth amid challenges both at home and abroad, including insufficient domestic demand and rising global protectionism.

According to a Goldman Sachs Research report in February, the widespread adoption of AI over the next decade could drive a 2.5 percent annual increase in the overall earnings of Chinese equities. Additionally, improved growth prospects combined with a potential confidence boost are expected to lift the fair value of Chinese stocks by 15 percent to 20 percent, and may attract portfolio inflows exceeding $200 billion.

"I look forward to 2025 as the year when Chinese AI apps really rise up and become among the best in the world," Lee said.