China banking on AI to boost efficiencies across the board

Artificial intelligence will take technology to new heights, empowering the real economy with industry integration, a leading expert told the 15th China Internet Industry Annual Conference 2025.

Wu Hequan, from the Chinese Academy of Engineering, said that “phones, computers and such products will be redefined by AI”, adding that AI will be applied to new scenarios in all walks of life.

He said accelerated integration of AI will bolster the automotive industry, and satellite remote sensing applications are also projected to improve with AI and satellite industry integration. Wu added that AI can optimize the supply chain to enhance operational efficiency.

In terms of new industrialization, AI contributes greatly to the gradual improvement of infrastructure construction, according to Du Guangda, deputy director general of the Science and Technology Department, Ministry of Industry and Information Technology.

By the end of 2024 there were more than 4,500 AI enterprises in China, with innovations of smart chips, development frameworks and general-purpose large models emerging. China’s computing power ranks second place worldwide.

Meanwhile, 5G base stations have exceeded four million nationwide and 421 national-level smart manufacturing demonstration factories have been cultivated with the integration of AI and the manufacturing industry. In addition, 72 Chinese enterprises have been selected as global ‘lighthouse factories’, the cutting-edge manufacturing sites, accounting for 42% of the world’s total.

Du added that the government was seeking to accelerate the construction of AI computing infrastructure, to promote the deep integration of AI with all walks of life, and to empower the development of the real economy.

Trade-in scheme extended to digital devices

China will significantly increase the sale of special treasury bonds to provide greater support for consumer goods trade-ins this year, extending the subsidies to digital devices such as smartphones, tablets and smart wearables to drive economic growth through consumption-boosting initiatives, according to analysts.

While the trade-in policies have in the past centred on traditional big-ticket items like cars and household appliances, the latest decision to include digital products signals the country’s determination to boost demand in the face of rising global uncertainties, they added.

The National Development and Reform Commission (NDRC), the country’s top economic regulator, said that China will provide consumers with a 15% discount on the purchase of such digital gadgets not exceeding 6,000 yuan (£660), with a 500 yuan subsidy cap per item.

The subsidy for digital products will be open to all eligible brands and models, said Li Gang, an official with the Ministry of Commerce, adding that the country will allow equal participation from a diverse range of enterprises, including both online and offline players, as well as companies of various ownerships and sizes.

Digital devices have become essential tools for communication, entertainment and productivity in modern society. By incentivizing their replacement and upgrading, the government aims to directly stimulate consumer willingness to buy, said Zhu Keli, founding director of the China Institute of New Economy.

China’s smartphone shipments are projected to reach 289 million units by 2025, representing a 1.6% year-on-year increase, with the market expected to maintain a stable growth trajectory in the following years, according to a report by IDC, a leading global market intelligence, data, and events provider for the information technology, telecommunications, and consumer technology markets.

Zhu added that the trade-ins can create a virtuous cycle, where increased consumer demand accelerates product turnover and spurs enterprises to invest in innovation, technological advancement, and supply chain optimisation. This can lead to a more dynamic and competitive digital products market, Zhu said.

Major Chinese phone brand Honor told the China Daily website that enterprises in relevant sectors will be able to reap the benefits of trade-in initiatives and fully leverage China’s vast consumer market, thereby sustaining the ongoing recovery and driving the next phase of growth in the domestic smartphone market.

The funds allocated to support the consumer goods trade-in initiatives are expected to double by the end of 2025, reaching 300 billion yuan, said Wang Qing, chief macroeconomic analyst at Golden Credit Rating International.

This will drive some 750 billion yuan in new consumption, equivalent to a 1.5 percentage point acceleration in the year-on-year growth rate of total retail sales of consumer goods in 2025, Wang added.