China's Lessons in Transforming Industries with AI

AI is rapidly reshaping industries globally, and China has emerged as a key player in demonstrating AI's ability to drive large-scale industrial transformation.

With a thriving AI industry worth over $70 billion and a vibrant ecosystem of over 4,300 companies, China offers insight into how countries can combine strategy, innovation and ecosystem development to tap into the transformative potential that AI offers.

The latest white paper is titled “Industries in the Intelligent Age - Action Plan: China's AI-Based Industrial Transformation Path” by the World Economic Forum (WEF) highlighted how China is using AI to address specific industry challenges, while also illustrating the complexity of scaling AI innovation responsibly.

While China's model may not be applicable everywhere, it offers valuable lessons about fostering innovation in individual industries and integrating AI into complex ecosystems.

Strategic foundations for AI development

China’s AI roadmap is built on a structured, phased approach. The “Next Generation AI Development Plan,” released in 2017, set ambitious goals, with the aim of making AI a core driver of economic transformation by 2025 and making China a global AI innovation hub by 2030.

The plan not only reflects a long-term vision, but also emphasizes the need to balance innovation and safety through flexible regulations. Some typical initiatives such as the “Temporary Measures for Managing Generative AI Services” (2023) and the “AI Safety Governance Framework” aim to address emerging risks while promoting technological progress.

These frameworks facilitate testing of AI applications while ensuring adherence to ethical principles, a balance many countries are aiming for.

The role of ecosystem support factors

China's AI development is driven by a robust ecosystem that seamlessly combines infrastructure, data, talent, and innovation. Investment in cutting-edge technologies, such as 5G networks and energy-efficient green data centers, has laid a solid foundation for the development of AI applications.

These infrastructure improvements greatly support the deployment of high-performance computing systems, which are crucial for training large-scale AI models.

Data plays a key role in this development. With one of the fastest-growing data ecosystems in the world, China has developed strategies to improve interoperability and data accessibility across multiple sectors.

The efforts to establish a National Data Administration demonstrate China's strong commitment to ensuring that data becomes the foundation for technological innovation.

At the same time, domestic educational and research institutions have also significantly expanded AI-related training programs, reflecting China's clear recognition of the growing need for a skilled workforce in this field.

The Specific Impact of AI on Industries

China’s approach to AI is heavily focused on practical applications, tailored to meet the unique needs of individual industries. By integrating cutting-edge AI technologies such as digital twins, predictive maintenance, and generative AI, China has helped industries such as manufacturing, healthcare, transportation, retail, and energy achieve transformative progress.

These innovations include optimizing manufacturing processes, improving patient care and diagnosis, implementing autonomous transportation systems, personalizing consumer experiences, and enhancing renewable energy management.

These advances not only reflect the potential for widespread AI adoption, but also illustrate how AI can drive efficiency, sustainability, and develop new business and operating models.

Tailoring AI solutions to industry-specific needs demonstrates an approach that can be adopted by other regions to maximize the impact of AI and overcome challenges in implementing the technology.

Challenges and opportunities

Despite its achievements, China’s AI development still faces many challenges. Issues such as fragmented data, regional capacity disparities, and a large human resource gap continue to be obstacles that need to be addressed.

To overcome these issues, China will need close cooperation across industries and regions. China’s experience also highlights the importance of maintaining interoperability between systems and fostering strategic partnerships to ensure effective AI expansion and adoption.

For global stakeholders, the lesson from China is not a rigid model but an illustration of how strategic alignment, developing ecosystem enablers and sector-specific innovation can help harness the potential of AI.

However, this journey also highlights the need to develop AI responsibly, while promoting international cooperation to address the complex relationships between technology, society and governance.

Through these collaborative platforms, stakeholders can work together to ensure AI development adheres to high ethical standards while effectively addressing global challenges.