China's New Smart Economy: A Shift Towards Systemic Transformation

China's government report emphasizes the transition to a smart economy, leveraging AI to reshape industries and enhance productivity.

A Deep Transformation from “Chatting” to “Doing”

This year, the government work report introduced the concept of creating a new form of smart economy, marking a significant shift in China’s AI development strategy from “tool empowerment” to “systemic transformation.” At a critical juncture in the 14th Five-Year Plan, the smart economy is becoming a core engine for cultivating new productive forces and promoting high-quality development.

During a press conference, Chen Changsheng, a member of the drafting group for the government work report, illustrated this transformation by sharing how he used AI to generate a New Year greeting video for his parents. Experts point out that the smart economy, driven by AI, will reconstruct the entire process of production, distribution, exchange, and consumption, empowering both traditional and emerging industries. Chen Tingjiong, director of the Shanghai Industrial Digitalization Research Institute, described the smart economy as an industrialization process of “AI+” characterized by five elements: application, computation, cloud, network, and data.

The government work report places the smart economy within the broader framework of “enhancing industrial momentum,” alongside traditional industry upgrades, emerging industry cultivation, and service industry upgrades, indicating its strategic importance.

Data shows that China is well-positioned to develop a smart economy. By 2025, the core AI industry is projected to reach 1.2 trillion yuan, with over 6,200 enterprises and the second-largest computing power globally. The integration of industrial internet applications has covered all 41 major industrial categories, nurturing 504 top-level smart factories.

A Multi-Dimensional Layout from “Single Breakthrough” to “Systemic Restructuring”

Creating a new form of smart economy is not just about breakthroughs by individual companies or technologies; it requires a core focus on “data + computing power + algorithms” to promote cross-domain integration of AI, advanced manufacturing, and new materials, achieving an overall upgrade of the industrial chain, supply chain, and innovation chain. This transformation demands a systematic capability upgrade for enterprises and industries.

On April 10, the Ministry of Industry and Information Technology held a press conference to promote the high-quality development of national high-tech zones, explicitly stating the goal of “comprehensively enhancing the development level of the AI industry in national high-tech zones and accelerating the creation of a new form of smart economy.” The focus is on three enhancements: boosting innovation capabilities to achieve original results in foundational algorithms and brain-like intelligence; enhancing industrial competitiveness by nurturing leading AI enterprises and creating internationally competitive AI industry clusters; and improving application levels by accelerating the layout of intelligent computing power facilities and creating a number of landmark application scenarios.

Shanghai is becoming a pioneer in this strategy. A representative from the Shanghai Municipal Economic and Information Commission stated that Shanghai is fully implementing the “AI+” action plan, focusing on manufacturing, productive services, and AI-driven scientific research to promote AI empowerment across various industries through tailored strategies. In knowledge-intensive sectors like finance, law, and accounting, Shanghai is exploring a new model of “intelligent execution + expert decision-making” to transform technological advantages into cost advantages.

Chen Tingjiong noted, “From a policy perspective, Shanghai has a complete systematic deployment, but more universal policy tools are needed to ensure that more small and medium-sized enterprises can access and afford these technologies.”

An Industrial Leap from “Single Tool” to “Universal Intelligence”

The vitality of the smart economy lies in its practical applications, with general-purpose intelligent robots serving as the core execution vehicle for the transition from “chatting” to “doing.” Unlike traditional single-function robots, these robots can operate across various scenarios, learn autonomously, and adapt flexibly, integrating perception, decision-making, and execution. They are also a key hardware support for the realization of the smart economy.

Jieka Robotics, based in Shanghai, exemplifies this trend. Vice President Chang Li shared that the company will complete a critical strategic upgrade in the second half of 2025, transitioning from a collaborative robot niche to a general-purpose intelligent robot enterprise, establishing a three-tier system from intelligent hardware to intelligent brain platforms and scenario-based application ecosystems. “We aim to upgrade robots to possess generalized operational capabilities, achieving a leap from single tools to universal intelligence.”

In the automotive seat quality inspection scenario, Jieka and its partners have developed an embodied intelligent solution that connects system platforms, AI algorithms, and intelligent robot terminals, creating a closed-loop capability from decision-making to perceptual operations. Previously, the manual inspection missed about 5% of defects and required line stoppages for adjustments; now, the robots can inspect five points in one second and over 100 points in 40 seconds, reducing the miss rate to below 0.1% and requiring only simple parameter adjustments for line changes.

“In the context of the smart economy, we have not only more efficient equipment but also a production unit that truly possesses autonomous judgment and flexible adaptation capabilities,” Chang Li stated, emphasizing the core value of general-purpose intelligent robots in empowering industrial upgrades.

Chen Tingjiong offered a broader perspective: “Currently, most enterprises are still using AI for efficiency improvements, but leading companies are replacing workflows with intelligent agents while simultaneously managing data and accumulating corpora. The actual scene video data generated in this process will significantly promote the development of multimodal large models in China.”

He believes that embodied intelligence and the smart economy are mutually reinforcing—on one hand, embodied intelligence is an essential component of the smart economy; on the other hand, the high-quality data generated during its implementation will enhance large model capabilities, creating a virtuous cycle.

“The current challenge is to break through how to scale and cost-effectively implement human-machine co-creation, which requires policies to shift from inclusive to precise support and for the upstream and downstream of the industrial chain to open scenarios and share data,” Chang Li concluded.

From traditional manufacturing to intelligent manufacturing, and from single industries to chain collaboration, the smart economy is breaking down industry boundaries. Intelligent terminals represented by general-purpose intelligent robots are accelerating the transition of the smart economy from concept to reality. Standing at the new starting point of the 14th Five-Year Plan, China is writing a new chapter in high-quality development.

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