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AI to play key role in revving up industrial upgrades

Application of high tech in various fields to accelerate next year, experts and execs say

By FAN FEIFEI | CHINA DAILY | Updated: 2025-12-22 07:35
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SONG CHEN/CHINA DAILY

Fast-evolving artificial intelligence is poised to play a pivotal role in bolstering industrial upgrades, helping China build new growth drivers and injecting strong momentum into high-quality economic growth, experts and company executives said.

The technology's application across various fields will accelerate in 2026, the first year of the country's 15th Five-Year Plan (2026-30) period, they predicted.

AI serves as an essential tool in nurturing new quality productive forces and is spearheading a new round of scientific and technological revolution, they said. The country's vast market, technological prowess and thriving innovation ecosystem underpin its capacity to move cutting-edge technology from research labs into the industrial arena.

China is at the forefront of the development and application of AI technology, while the multimodal large language models, or LLMs, which possess the ability to process and generate content across multiple modalities, including text, images, audio and video — will lead the further development of the AI industry, they added.

AI is forecast to contribute $19.9 trillion to the global economy through 2030, and drive 3.5 percent of global GDP in 2030, according to a report by global market research company International Data Corp.

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

Auspicious start

In January, Chinese AI startup DeepSeek caused a global sensation and sent shock waves through the tech industry with its cost-effective and open-source LLM. Its performance is on par with leading models from US tech company OpenAI, but at only a fraction of the cost and computing power of its rival. This has been achieved amid tightened export controls on AI chips from the United States.

Data from the China Academy of Information and Communications Technology showed that the nation has maintained its position as a global leader in AI innovation and released 1,509 AI models to date, ranking first among the 3,755 models launched globally.

China holds the largest number of AI-related patents, accounting for 60 percent of the total, according to a Chinese Academy of Cyberspace Studies report.

Leading Chinese tech heavyweights — including Alibaba Group, Baidu Inc and ByteDance - have stepped up efforts to roll out their own AI-powered LLMs to bolster technological advancements and commercial application of AI technology in a wide range of sectors such as manufacturing, healthcare, and finance.

In September, Alibaba Cloud, the cloud computing unit of Alibaba, unveiled its most powerful AI model, Qwen3-Max, which boasts over 1 trillion parameters, and demonstrates strength in code generation and autonomous agent capabilities.

Autonomous agent functionality means an AI system can make independent decisions and finish tasks independently with minimal human intervention. The advancement reinforces Alibaba's ambition to compete directly with leading Western counterparts, while accelerating innovation in China's sprawling AI ecosystem, market observers said.

Wu Yongming, Alibaba Group CEO, said the company will further increase its 380 billion yuan ($53.4 billion) investment in AI and cloud infrastructure over the next three years. Wu said the speed of the AI industry's development and the demand for infrastructure had far outpaced expectations.

"In the future, large AI models will be deeply integrated into a wide range of devices, functioning like operating systems - equipped with persistent memory, seamless cloud-edge coordination and the ability to continuously evolve," Wu said. "We remain committed to open-sourcing Qwen and shaping it into the 'operating system of the AI era', empowering developers around the world to build transformative AI applications."

Since the launch of the first generation of Qwen in 2023, Alibaba has open-sourced over 300 AI models built on its two foundation models. With over 600 million downloads and 170,000 derivative models, Alibaba's AI models are among the most widely adopted open-source AI series globally.

In November, Baidu released its latest LLM Ernie 5.0 model, which is capable of multimodal understanding and generation capacities, and can support input and output of text, images, audio and video.

The model features a comprehensive upgrade in its core capabilities, excelling in multimodal understanding, instruction following, creative writing, and tool application. It also shows strong abilities in comprehension, logic, memory and persuasion.

Robin Li, co-founder, chairman and CEO of Baidu, said LLM technology is evolving rapidly with the ability to self-learn, iterate and innovate. Li said his company will continue to invest in cutting-edge AI models to boost technological innovation.

He is bullish on the prospects of AI-powered digital humans, which can be used in fields such as e-commerce, education, healthcare, customer service and sales.

Competitive edge

China has attached great importance to the development of AI, a strategic emerging field that major economies are scrambling to gain a competitive edge in.

AI is not only crucial for boosting productivity, but also driving the transformation and upgrading of traditional industries.

The Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development emphasized that China should achieve greater self-reliance and strength in science and technology and steer the development of new quality productive forces.

The recommendations were adopted at the fourth plenary session of the 20th CPC Central Committee on Oct 23.

Efforts will be made to advance the "AI Plus" initiative across the board, steer the transformation of scientific research paradigms with AI, apply AI tools in industrial development, cultural advancement, public well-being initiatives, and social governance, and strive to gain the edge in AI industrial applications.

In August, the State Council, China's Cabinet, issued a guideline on the deep implementation of the "AI Plus" initiative. The country will promote the use of AI in science and technology, industrial development, consumption, people's well-being, governance capability and global cooperation, the guideline said.

By 2027, China will make achievements in the extensive and deeper integration of AI in six key sectors, with the penetration rate of new-generation intelligent terminals and AI agents surpassing 70 percent. This figure will exceed 90 percent by 2030, the guideline said.

Weng Xi, a professor at Peking University's Guanghua School of Management, said the "AI Plus" initiative is vital for shifting growth drivers from old to new ones, as AI has become a new engine bolstering China's economic development and industrial upgrading.

"The in-depth industrial integration of AI will enhance production efficiency, optimize operational processes and lower energy consumption and costs, thereby promoting traditional industries, including steel, textile and equipment manufacturing, toward high-end, intelligent and green development," Weng said.

Sun Ke, deputy director of the China Academy of Information and Communications Technology's Policy and Economic Research Institute, underscored the significant role of AI in cultivating new quality productive forces and reshaping new competitive advantages.

Strong implementation of the "AI Plus" initiative is conducive to accelerating the deeper integration of AI with the real economy, giving rise to new industries and new business forms, such as intelligent robots, self-driving vehicles and smart home devices, and strengthening China's core competitiveness on the global stage, Sun said.

Great strides ahead

According to market research company CCID Consulting, the market scale of China's AI sector will reach 1.73 trillion yuan by 2035, accounting for 30.6 percent of the global total.

Emphasizing the country's large-scale manufacturing and vast consumer market of 1.4 billion people, Zhu Min, a former deputy managing director of the International Monetary Fund, said China will make great strides in the use of AI technology in the next 18 months to two years.

Abundant industrial application scenarios present unique advantages for the development of AI, he added.

China has surpassed the US in the number of academic papers on AI, taking top spot worldwide, Zhu said. These papers are increasingly focused on the specific industrial applications of AI, he said.

China's services sector, technology, and AI have huge growth potential, with future employment in these emerging fields, Zhu said. Strengthening job retraining and letting people know how best to use AI are vitally important, he added.

It is clear that China is emerging as an innovation-driven economy, with breakthroughs in areas such as AI and robotics highlighting its growing capability in critical technologies that underpin long-term competitiveness, said Samantha Zhu, chairperson of Accenture Greater China.

"The wave of AI innovation, led by open-sourced large language models, is so encouraging that companies are quickly mobilizing themselves to harness such technologies," she said.

Adopting a holistic approach to productivity, with generative AI acting as a multiplier, could boost productivity growth from 1.9 percent to 15.9 percent, the consultancy estimates. China has one of the most vibrant AI ecosystems in the world, driven by a mix of enterprise adoption, tech startups and public-private partnerships.

Zhu said AI-driven transformation has strong momentum, with businesses quickly integrating AI into their decision-making, operations, and customer engagement.

"Looking at the vibrant AI ecosystem, we can say that China is not just an AI market — it's a proving ground for AI adoption by enterprises done at scale," she said.

Li Haitao, dean of the Cheung Kong Graduate School of Business in Beijing, said AI is profoundly reshaping the business landscape and is bound to transform various industries. China and the US have the greatest potential to lead the next round of the AI revolution, he said.

China boasts a large number of well-educated engineering talents and AI professionals, improved digital infrastructure such as 5G and computing networks, massive amounts of data, and ever-increasing innovation capabilities, which provide a solid foundation for the training and adoption of AI models, according to Li.

Zhou Yunjie, chairman and CEO of Chinese home appliance giant Haier Group, said AI will become the biggest technological revolution over the next 50 years. Currently, AI is mainly deployed by enterprises in manufacturing, research and development, sales, procurement, and services.

Every industry will integrate AI, and any enterprise that does not embrace AI will eventually be weeded out, Zhou said, adding that his company has invested heavily in developing LLMs and is promoting the application of AI in various fields, such as household appliances and industrial internet.

Li Dongsheng, founder and chairman of consumer electronics manufacturer TCL Technology Group Corp, said: "The application of AI in the high-tech manufacturing sector will bring about greater value than its use in terminal devices, as this cutting-edge digital technology will significantly improve the production efficiency and competitiveness of China's high-tech manufacturing enterprises."

Li said AI is increasingly being embedded in terminal devices, intelligent production lines and product research and development, and will bolster the development of China's high-tech manufacturing sector.

China's breakthroughs in LLMs, along with the meteoric rise of DeepSeek, have enabled it to rapidly catch up with the US in the AI domain, while surpassing most other developed economies in terms of AI applications.

Cui Jingyi, vice-president of United Kingdom-based industrial software developer Aveva and general manager of Aveva China, said the country has the most extensive application of AI technologies, bringing new opportunities for many companies, including her own.

She said Aveva will continue to increase investments in the country, leverage local strengths and drive industrial transformation through technological innovation.

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