China takes AI higher

CHINA, caught in a trade war with the United States, may find artificial intelligence (AI) as its biggest ally.

Its emphasis on bolstering the application of AI technology (tech) in a wide range of sectors will advance industrial upgrades and inject fresh momentum into economic growth.

It will also create immense business opportunities for multinational corporations to invest in the country, according to industry experts and company executives.

With the sweeping new tariffs by the United States, they say it is vital for Chinese tech enterprises to embrace innovation and achieve tech breakthroughs in AI, improving China’s core competitiveness.

Chinese AI startup DeepSeek’s cost-effective and open-source models serve as a catalyst to accelerate China’s adoption of AI, while the country’s super-large market, technological prowess and thriving innovation ecosystem give it the capacity to drive techs from research labs into the industrial arena.

This year’s Government Work Report stated that under the AI Plus initiative, the country will work to effectively combine digital tech with its manufacturing and market strengths.

Global market research company International Data Corp says that AI is forecast to contribute US$19.9 trillion to the global economy through 2030, and drive 3.5% of global gross domestic product in 2030.

By automating routine tasks and unlocking new efficiencies, AI will have profound economic consequences by reshaping industries, creating new markets and altering the competitive landscape.

Xu Sitao, chief economist of Deloitte China, says the scale of China’s AI sector was estimated to have reached 319.4 billion yuan (US$43.7 bil) in 2024, and AI will be applied in industries such as manufacturing, healthcare, finance, agriculture, retail and logistics.

Stefan Hartung, chairman of the board of management at German industrial conglomerate Robert Bosch GmbH, says the company has leveraged AI tech in autonomous driving, home appliance products and factories in China.

“Our Chinese colleagues are taking the newest technologies, applying them and inventing new ones, which is a good thing,” Hartung says in a recent interview with China Daily, adding that he is bullish on prospects for the application of cutting-edge AI tech in the Chinese market.

He adds Bosch has collaborated with many Chinese AI companies, such as autonomous driving startup WeRide.

“There are many other cooperation arrangements we have with AI companies in China, so it makes perfect sense to do this in cooperation.”

Cui Jingyi, vice-president and general manager of industrial software developer Aveva China, says China is becoming the market with the most extensive application of AI techs globally, bringing new opportunities for many companies.

“We see AI as humanity’s tool, an exciting innovation that will help meet sustainability goals and do more with less.

“Industrial tech, especially AI, can turbocharge industries’ progress toward efficiency and sustainability,” Cui says.

For instance, the speed and scale of data analysis will be significantly improved by leveraging AI, which will help companies quickly assimilate new information and boost operational productivity, she says.

China’s AI sector will make big strides in the next 10 to 15 years, with its market size reaching 1.73 trillion yuan by 2035, accounting for 30.6% of the global total, says market research company CCID Consulting.

China is not only a manufacturing powerhouse, but also a global innovation engine driving trends in digitalisation, sustainability and high-tech industries, says Denis Depoux, global managing director of market consultancy Roland Berger.

“What Chinese companies are super good at is usually adopting technology and making it practical.”

It is quite critical for foreign companies to continue to invest in technological research and development in China, and there will be a lot of scientific discoveries and disruptions coming into innovation, Depoux says.

He notes that AI is progressing very quickly in China, and DeepSeek is just one example as there will be another “DeepSeek” down the road.

He adds it is noteworthy that all or most of the large language models of China are open-source.

So, basically everybody can use them, including foreign companies.

There is no doubt AI will continue to bring huge opportunities, yet the misuse of AI tech is also capable of creating serious worldwide risks and challenges.

Depoux says that as one of the tech leaders, China should take more responsibility in promoting sustainable development of AI tech and tackle challenges for all human beings through global collaboration on governance.

With AI integrating into every facet of people’s lives and industrial development, more effort should be made to strengthen international cooperation to build an open, collaborative and innovative AI industrial ecosystem, says Ouyang Rihui, assistant dean of the China Centre for Internet Economy Research at the Central University of Finance and Economics.

According to him, China’s inclusive attitude in AI will also help promote the coordinated advancement of the global AI industry.

“China is one of the front-runners in generative AI development in the Asia-Pacific region, and is actively using cutting-edge tech to modernise various sectors and cultivate talent,” says Wu Chun, managing partner of Boston Consulting Group Greater China.

According to BCG’s research, the global AI adoption landscape presents a significant imbalance.

Notably, only five economies are categorised as AI pioneers, and the Chinese mainland is among them.

As an AI pioneer, the Chinese mainland has gained a competitive advantage in skills, research and development, ecosystems and investment, and is taking the lead in patents and AI academic papers, the research says.

The open-source ecosystem and exploration of AI application scenarios are reconstructing the path of tech evolution, Wu says.

Chinese enterprises are accelerating the adoption of generative AI tech.

According to a report from Accenture, 87% of surveyed Chinese companies plan to ramp up AI investment in 2025 while 58% of the interviewed business executives in China feel that their enterprises’ AI development is proceeding faster than expected.

Chinese enterprises’ current investment in generative AI is mainly concentrated on core technology infrastructure and data, such as AI platforms, cloud and data management, and talent and skills development, Accenture says.

The report also found that about 85% of the interviewed Chinese employees are currently using generative AI-based tools in their work, with 63% leveraging these tools for more than a year, with their main purpose being data analysis.

Yu Yi, tech lead at Accenture China, says that as companies strive to stay ahead and adapt to fast-changing markets, they are increasingly turning to AI tech to fuel their innovation efforts.

The proportion of Chinese companies stepping up investment and boosting the application of AI is also rising dramatically, Yu says.

He added that Chinese enterprises have sped up digital transformation in their globalisation push, with more generative AI techs having been adopted amid enterprises’ efforts to expand their footprint in overseas markets. — China Daily/ANN