China’s core AI industry has surpassed 1 trillion yuan, underscoring a strategic shift toward technology-led industrial growth and supply-chain self-reliance.
 |
| China’s AI sector crossing 1 trillion yuan signals deeper integration of artificial intelligence into manufacturing and long-term industrial strategy. Image: CH |
BEIJING, CHINA — December 27, 2025:
China’s artificial intelligence sector reaching a value of more than 1 trillion yuan ($142 billion) in 2025 marks a significant inflection point in the country’s industrial transformation. Announced at a national conference on industry and information technology, the milestone reflects how AI has evolved from an emerging technology into a central pillar of China’s economic and industrial strategy.
The scale of the AI sector suggests that Beijing’s long-standing focus on digital and intelligent manufacturing is beginning to deliver measurable results. Rather than treating AI as a standalone industry, policymakers have embedded it across manufacturing, equipment production, logistics, and industrial services. This integration has helped lift productivity in traditional sectors while accelerating the growth of new ones.
Plans outlined by the Ministry of Industry and Information Technology (MIIT) for 2026 reinforce this trajectory. Continued investment in AI research and development will be paired with efforts to cultivate future-oriented industries such as integrated circuits, next-generation display technologies, advanced materials, aerospace, biomedicine, and the low-altitude economy. Together, these sectors point to a broader strategy aimed at building technological depth and reducing reliance on foreign suppliers in critical areas.
Industrial performance data provides further context. Authorities expect the added value of major industrial enterprises to grow by 5.9 percent year on year in 2025, while high-tech manufacturing and equipment manufacturing have already posted growth of more than 9 percent in the first 11 months of the year. This gap suggests that innovation-driven industries are becoming the main engines of industrial expansion.
Small and medium-sized enterprises have also emerged as a key force. Government support for more than 600,000 technology- and innovation-driven SMEs, alongside a nationwide total of over 500,000 high-tech companies, indicates an effort to broaden the innovation base beyond large firms. This diversification is critical for sustaining long-term growth and avoiding overconcentration in a few dominant players.
Industry and Information Technology Minister Li Lecheng’s emphasis on supply-chain self-reliance and resilience highlights the strategic backdrop to these developments. Amid global technological competition and trade uncertainties, strengthening domestic capabilities has become both an economic and geopolitical priority. AI plays a dual role in this context—driving efficiency at home while reducing exposure to external shocks.
As China moves beyond the trillion-yuan mark, the next challenge will be maintaining quality and efficiency alongside scale. Ensuring that investment translates into genuine innovation rather than excess capacity will be key. If successful, China’s AI expansion could signal a transition from rapid industrial catch-up to sustained technological leadership, reshaping its role in the global industrial landscape.