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AI: China's plan to dominate the global market by 2030 - Analysis

China is rapidly advancing in artificial intelligence with massive investments, government strategic plans and technological innovations that challenge Western dominance. The country aims to become a global leader by 2030 with significant economic and geopolitical implications



China is fast moving towards global technological pre-eminence, positioning itself as a leading country in artificial intelligence (AI). In particular, Beijing has gained a competitive advantage in various aspects of the AI ​​industry, showing strength in terms of academic papers, patents, cross-border investment and global financing. 



Credit GettyImages
Credit GettyImages

After the launch of Manus a few days ago, a Chinese bot equipped with AI, a wave of visitors caused the registration site to crash. Butterfly Effect, the company that designed the bot, claims that its technology surpasses that of OpenAI, maker of Chatgpt.

Manus, however, is only the latest example of the obsession that has been overwhelming China for a few months. During the last Chinese New Year, DeepSeek R1, a Chinese AI model attracted intense global attention, sparking heated discussions. It surpassed ChatGPT, which had been in the spotlight before, and topped the free APP download chart on Apple's App Store in both China and the United States. 


The launch of DeepSeek technology sent shock waves throughout the investment world. U.S. technology stocks fell rapidly, and shares of chip giant Nvidia fell sharply, losing about $593 billion in market capitalization. This disruption of the American market by the Chinese challenges the long-held belief that American companies would maintain dominance in the AI ​​sector. The effect on Chinese markets, however, has been stunning, with stocks enjoying their best start to a year on record. “The Hang Seng Tech Index, which tracks China's largest technology companies listed in Hong Kong, is up more than 40% since mid-January,” writes The Economist.


This achievement indicates that China is continuously exploring new frontiers in the development of artificial intelligence and rising to greater heights. Many in China are betting that cheaper AI will open the door for innovators to design new applications for the technology. According to national lawmakers, policy advisors and experts, yes predicts that AI technology will drive an industrial revolution in China, also accelerating the development of autonomous and intelligent connected vehicles, as AI is emerging as a key strategic opportunity for the automotive industry. 


Even i Cloud computing providers are increasing investment in data centers, triggering a surge in capital spending across the supply chain. 


However, as it happened make evident, it is important to remember: 

  • that Chinese state involvement in technology sectors such as AI is ubiquitous;

  •  that all of Beijing's technology programs benefit from foreign know-how; 

  • that Chinese planners are aware of AI's war role.


There is no doubt, however, that the shift in market positions between the United States and China in the AI ​​sector raises uncertainties about the future of innovation, data sovereignty and the geopolitical implications of leadership in the sector.


Demand for AI servers is growing

“Demand for AI-tailored servers has soared since the end of the Chinese Lunar New Year in early February, coinciding with DeepSeek's rise to prominence, according to Liu Yiran of HSBC, a bank,” it needs The Economist. “Vendors have started offering “all-in-one” servers already equipped with artificial intelligence software.” Many are sold directly to companies that prefer to have servers on their premises to improve security, including state-owned enterprises. “Sangfor Technologies, founded by a group of former Huawei employees, has been one of the biggest beneficiaries of this trend: its share price has increased around 140% this year.” Liu and his team estimate that the all-in-one server market will grow by an average of more than 70% per year through 2028.


Capital investments 

China's AI boom is encouraging capital investment across the country's hardware supply chain, The Economist reports. Server makers could spend more than 1.4 billion yuan over the next two years to expand production capacity, analysts at investment bank Jefferies said. GDS, one of the largest, has increased its capital spending plans. VNet, a competitor, recently said it plans to double its capacity this year, although “some analysts are starting to urge caution,” writes The Economist.


Becoming a global technological power


MMany Western countries fear that Beijing could come to dominate the most significant technological industries of the future. China is already a global leader in 5G telecommunications equipment, as well as for commercial drones, Internet of Things devices, mobile payments, solar cells and smart cities. And where it is not in the lead, it is often a world-class competitor, for example in artificial intelligence (AI), an area in which Beijing has developed a substantial development plan. Furthermore, China ranks first in the world for STEM graduates and second for research and development (R&D) spending.

Its geographically concentrated technology centers have revolutionized supply chain and manufacturing integration. Government technology policies, such as programs Made in China 2025 and Digital Silk Road, demonstrate Beijing's attention to a long-term technological strategy.


And esteem that China's investment in AI will reach a sizable amount of $26.7 billion by 2026, accounting for about 8.9% of global investment in AI. This will position China as the world's second largest investment destination in the sector. These figures indicate China's strong commitment and growing influence in the field of AI, both domestically and globally.


The political strategy for the development of AI

China has actively promoted the development of AI through various policy initiatives. In July 2017, China's State Council (the executive) released the Artificial intelligence development plan of next generation (AIDP) aimed at making the nation the leading global power in the sector by 2030.


In 2023, the Ministry of Science and Technology launched a special deployment of "AI for Science" to accelerate innovation and promote the high-level application of AI in key sectors. Artificial intelligence was also identified as a key industry in China's controversial Made in China 2025 industrial plan which stated that China's goal was to become a global leader in the sector by 2030.


The Next Generation Artificial Intelligence Development Plan (2017), which received significant attention, is supported by the highest levels of the Chinese leadership, primarily by Xi Jinping, General Secretary of the Chinese Communist Party (CCP). 


The AIDP, in particular, states that "Artificial intelligence has become a new focus of international competition. AI is a strategic technology that will lead in the future; the world's major developed countries are taking the development of AI as an important strategy to enhance national competitiveness and protect national security." 


Three, in particular, are the main sub-fields pursued by Beijing:

  • traditional (computational) AI research;

  • “connectomics” of brain-inspired AI studies;

  • brain-computer interfaces that result in cognitive enhancement. 

Furthermore, AI has been indicated as the first technological priority in the Chinese government's five-year economic plan for 2021-2026. 


Senior Chinese leaders, therefore, consider AI fundamental to the future of Beijing's economic and military power. For this reason, on May 5th President Xi Jinping himself returned to underline China's determination to seize the opportunities of AI to modernize its industrial system.


According to the Center for Security and Emerging Technology (CSET), the CCP, “the national government, universities, research laboratories and technology companies have demonstrated an unwavering commitment to promoting AI not only in applications, in which China has strong experience, but also in cutting-edge research that has historically never been its strong point.” 


Furthermore, from 2016 China will be busy in a national effort to “merge” artificial and human intelligence as an important part of the next-generation AI development agenda. According to the Center for Security and Emerging Technology, the effort would not only be Chinese but also other nations such as the United States, "although Beijing enjoys natural advantages that can accelerate its success."


Furthermore, the Beijing Ministry of Science and Technology (MOST) has coordinated the establishment of next-generation AI open innovation platforms to cultivate the technology development and application environment. Notably, 15 such platforms have been established nationwide which focus on core software and hardware, smart healthcare, smart supply chain and smart city governance, respectively. Beijing has also established a series of pilot zones for the innovative development of next-generation AI that aim to "help pilot projects and promote industrial upgrading through AI technology. To date, there are 11 such pilot zones across China." As mentioned, numerous local governments have invested in AI technologies through state investment funds. In the Beijing area, for example, Hangzhou and Shenzhen have co-sponsored generative AI research workshops with universities and technology companies, in collaboration with national ministries. The Beijing Artificial Intelligence Academy, in particular, created the first large-scale pre-trained language model with the joint sponsorship of MIIT, the CPC Committee, and the Beijing government.


The public regulatory intervention of AI

Over three decades, Beijing has adopted at least a dozen state laws and regulations relating to scientific development, namely:

Furthermore, China has also emerged as a frontrunner in AI regulations, implementing various initiatives to foster and oversee the growth of the sector. They can remember the Made in China 2025, l'Action Outline for Promoting the Development of Big Data (2015) and the Next Generation Artificial Intelligence Development Plan (2017).

Beijing has also been proactive in enacting laws regulating the ethics of businesses and AI algorithms. 


The definition of the basic rules that generative AI services must follow

In recent years, as global competition in the field of AI has become increasingly fierce and the impact of its development gap has become deeper, the Chinese government has always maintained a positive attitude towards promoting and supporting the development of AI technology. For this reason, in July 2024 the Guidelines for building the global standardization system of the national artificial intelligence industry. They propose that more than 50 national and industrial standards will be formulated by 2026 to standardize the technical requirements for the comprehensive intelligentization of manufacturing industry processes and the intelligent upgrading of key industries using AI technology.

In essence, with them China aims to find a balance between promoting AI advancements and ensuring responsible and ethical AI practices within the country.


The Guidelines for building the global standardization system of the national artificial intelligence industry work in tandem with existing regulatory frameworks that provide development guidance for the AI ​​sector, such as:

The organizations involved in the AIDP Plan

According to a studio conducted by the CSET think tank in 2022, there would be at least thirty national organizations - net of multinationals doing AI research in China such as IBM, Intel, Microsoft, etc. - involved in the implementation of the China's artificial intelligence development plan of new generation (AIDP).


Military-Civilian Fusion (MCF)

In the field of AI, the MCF also deserves a mention strategy aimed at transforming the People's Liberation Army (PLA) into a "world-class army" by 2049. With this program, the CCP is systematically reorganizing China's scientific and technological enterprise to ensure that new innovations simultaneously advance the country's economic and military development. China pursues MCF development to “fuse” its economic and social growth strategies with those of security to build an integrated national system, with capabilities to support goals of national rejuvenation. The CCP sees the MCF as key to advancing its regional and global ambitions. As mentioned, it believes that artificial intelligence will drive the next revolution in military affairs and that the first country to apply it to next-generation warfare will achieve military dominance. MCF, therefore, aims to pave the way for China to be the first country to transition to “intelligent warfare” and develop the military capabilities it considers critical to achieving these goals. Key technologies include quantum computing, big data, semiconductors, 5G, advanced nuclear technology, aerospace technology and artificial intelligence.


The Pentagon's concerns

Beijing has given priority above all to investments in AI for defense and national security to have "world-class armed forces" and obtain advantages in the future “smart” war, in which it (along with other emerging technologies) will be fully integrated into military operations with “networked, intelligent and autonomous systems and equipment”.


For the White House, China's advances in artificial intelligence pose a significant risk as the CCP, unconstrained by respect for individual freedoms and human rights, exploits the vast amounts of data it collects to refine the artificial intelligence algorithms that will power the next generation of networked technology.


The Pentagon, in particular, has admitted to have a particular interest in AI both for the intensification of strategic competition with China and, to a lesser extent, with Russia, and to maintain the advantage maintained by the US military since the end of the Cold War; although, for some experts of American Defense, the USA would have already lost in the technological-military competition with China.


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