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China Deepens AI Integration to Drive Smart Economy and Industrial Transformation

Compiled from a report by China Daily on March 13.

China is accelerating the integration of artificial intelligence into core industrial and enterprise processes, aiming to transform its smart economy and unlock new growth potential for domestic and international investors.

According to recent discussions following the 2026 Government Work Report, the country is pushing to create new forms of smart economy” by embedding AI technologies deeper into business operations, production, and service workflows.

AI as a Core Driver, Not Just a Tool

Experts emphasize that AI’s real value lies beyond simple automation. Jiang Qiping, deputy director of the academic committee of the China Management Science Society (CMSS), notes that deep integration into industrial scenarios is essential to unlock efficiency, productivity, and innovation potential.

Muhammad Hamayun, a scholar from Multimedia University in Malaysia, highlighted that China’s AI-driven transformation is entering a new strategic phase, where AI restructures enterprise processes rather than acting as a supplementary tool. This system-level adoption is seen as a key enabler for sustainable economic modernization.

Industrial Scale and Growth Projections

China’s core AI sector surpassed 1.2 trillion yuan ($174.5 billion) by the end of 2025. Analysts predict that AI-related industries could exceed 10 trillion yuan by 2030, illustrating the scale of opportunity for investors and multinational corporations seeking exposure to emerging technologies and smart industry applications.

Guo Wei, chairman of digital transformation services provider Digital China, stressed that AI adoption should be process-centric, not function-centric. By reorganizing data assets and integrating intelligent agents across operational workflows, companies can achieve significant leaps in productivity, decision-making, and competitiveness.

Li Gang, VP and CTO of Digital China, noted: AI is evolving from an auxiliary tool to a core driver of enterprise operations, enabling firms to transition from traditional information systems to intelligence-centered development paradigms.”

Case Study: Automotive Sector

Digital China’s process-driven AI framework has already delivered measurable impact for Voyah, a high-end smart electric vehicle brand under Dongfeng Motor Corp. By embedding large AI models across production, sales, and service operations, Voyah has optimized knowledge governance, automated workflows, and enhanced end-to-end operational efficiency.

Xu Yuance, head of digital large model applications at Voyah, said: This approach generates far more value than simple efficiency gains. It enables high-quality, integrated delivery and facilitates effective collaboration across teams and processes.”

Investment Implications

For international investors and industry observers, the key takeaways are:

  1. Process-Oriented AI as an Investment Lever: Companies deeply integrating AI into workflows are better positioned to scale efficiently and achieve sustainable competitive advantage.

  2. Smart Economy Expansion: China’s policy push toward AI-driven industries creates new opportunities for technology providers, industrial partners, and cross-border investment.

  3. Sectoral Spillovers: Deep AI integration is not limited to technology companies — sectors like automotive, manufacturing, logistics, and smart services are prime targets for AI-driven growth.

In short, China’s “AI for Process” and “AI Plus” initiatives signal a structural shift in enterprise operations, transforming AI from an optional tool into a core driver of productivity, innovation, and industrial modernization. For global investors, this offers a strategic entry point into the next phase of China’s smart economy.

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