“Intelligent Everything”: China’s Policy to Supercharge AI Adoption
In August 2025, China’s State Council issued “AI Plus,” a policy directive aimed at guiding sector-wide adoption of Artificial Intelligence (AI) domestically in China. This builds on the momentum from July 2025, when China hosted its annual World Artificial Intelligence Conference (WAIC) in Shanghai and launched the “Global AI Governance Action Plan.” These developments reflect the continuation of a broader strategic roadmap initially outlined in China’s 2017 New Generation Artificial Intelligence Development Plan, which set out Beijing’s ambition to become a global AI leader by 2030. Together, these recent policy announcements give insights into how China is approaching AI governance and diffusion across its economy, and what signals they send to both domestic and international stakeholders.
What is “AI Plus”?
China’s “AI Plus” plan is a call to action aimed at accelerating the application of AI across all areas of the Chinese economy, industry, and society. It serves as an AI adoption roadmap that combines national goals of boosting consumption, industrial upgrading, scientific innovation, social welfare, workforce reskilling, global cooperation frameworks, and more. China’s rhetoric frames AI as a public good and a core engine for economic growth. As such, the plan represents a whole-of-nation approach to mobilize resources towards AI.
Overall, AI Plus is a ten-year plan to ensure that by 2035, China will have comprehensively created an AI-integrated economy and society that supports China’s development goal of ‘socialist modernization’ — that is, the pursuit of technological and economic development while maintaining China’s socialist governance model.
How Successful Have Other Long-Term Plans Been?
China has a decent, albeit imperfect, record of bringing ten-year economic and industrial plans to successful fruition. At times, gains from industrial policies are not uniform, with varying degrees of success seen across sectors. An example of this is the Made in China 2025 plan, a strategic industrial policy launched in 2015 to promote high-tech industries and high-value-added sectors of the economy. The Made in China 2025 plan has been largely successful in reducing China’s reliance on foreign technology and supply chains and propelling China to global leadership, particularly in industries such as advanced rail transit equipment, electric vehicles, and renewable power generation. While its performance was more mixed in areas like aviation and integrated circuits, the plan still drove substantial expansion of China’s manufacturing capabilities and growth in domestic and global market share. Without the disruptions of election cycles or changes of government, China can set long-term policies and direct significant political support and targeted investments towards their implementation.
What Does the “AI Plus” Plan Call For?
In the short term, China is seeking to ensure that AI-powered “intelligent terminals” and AI agents are integrated across key sectors, pushing to achieve a penetration rate of 70% by 2027. There is no guidance on how ‘AI penetration’ will be measured, but the tight timeline provides impetus for institutions across China to rapidly implement AI initiatives now. Many areas of the Chinese economy have already embarked on digitization and AI-related initiatives. This includes deploying AI to optimize production processes for manufacturing, enhance medical diagnostics and patient care, and improve renewable energy management. Combined with an advanced manufacturing base, these efforts place China in a strong position to accelerate AI integration across its key industries.
While the AI Plus policy emphasizes critical areas for AI, such as building robust AI infrastructure, scaling intelligent products and services, and embedding AI into business and government processes, it does not specify exactly what activities need to be undertaken. Regions and institutions are given leeway to implement AI measures according to their own “specific conditions.”
How Will China Navigate Access to Chips Necessary for AI?
Access to the most advanced semiconductors that train and run AI is a key vulnerability for China. The gap is most pronounced in cutting-edge chip manufacturing, where China’s domestic industry is still developing. The United States has progressively tightened controls on the export of advanced semiconductors to China, although second-rate chips can still be sold under strict licensing arrangements. China wants to have domestic semiconductor supply chains and capabilities that are independent of the United States and its allies. This means investing in domestic tech companies to rapidly catch up on top-tier semiconductor manufacturing, currently dominated by Taiwan, and chip design, currently dominated by the United States.
As part of its effort to reduce reliance on foreign supply chains, the Chinese Government recently directed its largest domestic AI firms, including ByteDance and Alibaba, not to purchase Nvidia chips due to alleged security and remote access concerns. Meanwhile, Huawei is ramping up its high-end chip manufacturing, and multiple Chinese tech firms, such as Alibaba and Xiaomi, are also embarking on their own chip development.
What Are China’s Ambitions for Global AI Governance?
The Chinese Government’s Global AI Governance Action Plan refers to a strategic framework that outlines a vision for the development and regulation of AI globally. Released in July 2025 at the World AI Intelligence Conference — a multilateral event in Shanghai supported by the United Nations (UN) — the stated goals of the Global AI Governance Action Plan include advancing global AI development for the good of humanity, driving economic and technological growth, and respecting national sovereignty. Moreover, the Action Plan emphasizes the importance of a coordinated global approach to ethical AI and proposes 13 actions aimed at promoting the development and application of safe and controllable AI.
In Chinese Premier Li Qiang’s opening address at the World AI Conference, he called on the international community to place greater emphasis on the joint governance of AI. Li also stated that China would help to ensure that the benefits of AI are captured by all countries, including the Global South, and proposed the establishment of a new international “World Artificial Intelligence Cooperation Organisation” (WAICO) to coordinate the development of AI and support the UN’s role as an integral channel for AI governance.
These initiatives aim to position China as a global leader on AI governance and the AI partner of choice, particularly vis-à-vis the United States. For many countries not allied with the United States, China is already a dominant supplier of technology services, digital infrastructure, and equipment. China can take advantage of these existing technology partnerships to export its AI products and deepen AI cooperation. Previous large-scale projects, such as the Belt and Road Initiative, raised alarm about China’s use of economic carrots to win global influence. By promoting multilateral AI governance and aligning with the UN’s Pact for the Future and Sustainable Development agenda, China may be trying to diffuse opposition to its global AI ambitions, particularly in the face of continued claims by the United States that Chinese AI technologies are insecure and undemocratic.
What Are the Implications for Australia and the Indo-Pacific?
As China forges ahead with its implementation of AI, the Australian Government’s stance on China of “cooperate where we can, disagree where we must and engage in the national interest” will be applicable on topics relating to AI and other technologies. There are notable areas of focus in China’s AI Plus plan that may eventuate in technologies and outcomes that Australia can learn from and utilize. In the Australian Financial Review in July 2025, Chinese Ambassador to Australia Xiao Qian stated that China was open to “actively exploring new growth areas in emerging fields like artificial intelligence, healthcare, green energy, and the digital economy.” In areas like agriculture, aged care, child digital safety, and energy, it would serve Australia well to monitor China’s development and identify areas where cooperation is feasible.
One specific area of China’s AI Plus plan that is also a core national interest for Australia is the topic of energy and the environment. While AI requires vast amounts of energy for training and processing AI models, it also has the potential to offer beneficial scientific and technological breakthroughs for the clean energy transition. These include accelerating advances in renewable energy technologies, optimizing electricity grids, and improving the speed and accuracy of climate modeling. Australia is already in dialogue with China on issues of steel decarbonization. Australia may find ‘AI for climate and energy’ a non-contentious and productive topic to engage on with China.
China is a leading manufacturer of AI-related hardware technology and offers competitive cost options for these products and equipment globally. Australia will face a balancing act on what Chinese hardware tech it is willing to adopt and permit in the country. For hardware related to critical infrastructure, such as telecommunication networks and onshore data centers, the choice for Australia will need to be American or solutions from other trusted partners. In the context of sensitive defense and dual-use technologies in particular, security partners like the United States will expect Australia to avoid Chinese products and vendors. The US AI Action Plan already outlines an export control strategy on sensitive technologies designed to promote the adoption of a secure, US-aligned technology stack among allies and prevent their dependence on “foreign adversary technology.”
Across other products such as electric vehicles, drones, robotics, and other consumer and industrial devices, defining the boundaries for Chinese hardware tech adoption and interoperability in Australia will be less clear-cut. In software and applications related to AI, including social media like TikTok and large language models like DeepSeek, trade-offs will need to be made between security, cost, and availability.
