China’s rapid advancements in artificial intelligence (AI) are capturing global attention. During a recent visit to Beijing, Jensen Huang, CEO of U.S. tech giant Nvidia, remarked, “AI is moving very fast in China,” highlighting the nation’s swift progress in this cutting-edge field.
Huang’s observation is more than just a diplomatic remark. Earlier this year, Chinese AI startup Deepseek gained widespread attention, overshadowing global leaders like Nvidia and triggering significant movements in AI stocks. This surge in innovation is reflective of a broader trend in China, where companies such as iFlytek, SenseTime, and DJI are making waves globally with breakthroughs in facial recognition, voice recognition, and drone technologies.
The rise of these tech giants underscores China’s commitment to high-quality development, shifting focus from traditional growth models to innovation-driven progress. “New industries, business models, and economic formats represented by ‘Artificial Intelligence+’ are accelerating,” said Zheng Shanjie, head of the National Development and Reform Commission (NDRC), at a recent press conference.
Zheng noted that the value-added output of the AI-related economy in 2024 exceeded 24 trillion yuan (approximately $3.3 trillion), equivalent to the combined GDP of Beijing, Shanghai, and Guangdong. Yuan Da, secretary general of the NDRC, emphasized that innovation has become the main driving force propelling high-quality development in China.
According to Zheng, China’s economy grew at an average annual rate of 5.5% during the first four years of the 14th Five-Year Plan period (2021-2025), projecting an economic increment of over 35 trillion yuan by 2025.
The ongoing 14th Five-Year Plan has witnessed significant achievements, with AI standing out as a key driver of technological advancements. Zheng highlighted several landmark innovations, including the Fujian aircraft carrier—the first domestically built carrier equipped with electromagnetic catapults—and the “Aida Magic City,” the nation’s first domestically built large cruise ship.
China’s space endeavors have also been impressive, with the completion and operation of its first space station, Tiangong, and the historic Chang’e-6 mission, which successfully returned the first samples from the far side of the Moon. Additionally, China’s leadership in 5G technology and the high automation levels at facilities like Xiaomi EV’s super factory in Beijing showcase the nation’s technological prowess.
The 2024 Global Innovation Index report, released by the World Intellectual Property Organization, confirms China’s growing technological influence. The country now boasts 26 innovation clusters among the global top 100, up from 24 last year, maintaining its top rank for the second consecutive year.
Behind this rapid development is a significant increase in research and development investment. In 2024, China’s total R&D expenditure reached 3.6 trillion yuan, ranking second globally. Zheng mentioned that R&D expenditure has surged nearly 50% from 2020 to 2024, with R&D intensity hitting 2.68%, approaching the average of OECD countries.
China has also optimized its fiscal and taxation policies to further boost technological innovation. Since 1996, policies for additional deductions on enterprise R&D expenses have been expanded, with increased deduction ratios and simplified procedures. In 2023, enterprises enjoyed cumulative deductions amounting to 1.85 trillion yuan, encouraging corporate investment in innovation.
Moreover, China is actively cultivating talent in high-demand sectors. Many regions have established AI schools and launched talent programs to meet the growing need for skilled professionals.
As the 14th Five-Year Plan draws to a close, a new development strategy for the next five years is on the horizon. Huang Qifan, academic advisor to the China Finance 40 Forum, stated that China’s economy is poised to enter a critical phase of fully promoting the development of new productive forces during the 15th Five-Year Plan (2026-2030). Wan Zhe, an economic expert and professor at Beijing Normal University, emphasized that strengthening technological innovation capabilities is crucial for China to stay competitive amid global technological and industrial challenges.
China’s push for innovation and high-quality development is not just transforming its own economy but is also reshaping global technological landscapes. With substantial investments in AI and other advanced technologies, China is positioning itself as a leader in the next wave of global innovation.
