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China bets on AI, manufacturing to narrow digital gap with US
China set a target in its 15th five-year plan for the digital economy to reach 12.5% of GDP by 2030 as part of efforts to boost advanced manufacturing and AI integration.
The goal was announced at the annual “two sessions” meetings after the digital economy accounted for 10.5% of GDP in 2025.
An outline of the 15th five-year plan proposes 28 major projects focused on “strengthening industrial foundations and competitiveness, fostering emerging industries and new growth tracks, advancing frontier technologies and enhancing innovation capacity.”
The government plans 5G upgrades and to connect factory equipment this year to support more automated and intelligent production systems and develop national advanced manufacturing clusters.
Premier Li Qiang said China must build a modern industrial system with advanced manufacturing as its backbone and pursue greater self-reliance in science and technology.
🔗 Source: South China Morning Post
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Implications, context, and why it matters.
China’s manufacturing upgrade follows a detailed playbook
- The plan sets broad goals, while the government uses an organized approach based on a Ministry of Industry and Information Technology (MIIT) blueprint 1.
- The guide maps digital upgrades to specific operational bottlenecks across 14 industries, including new energy vehicles and medical equipment 1.
- Officials are rolling it out through a tiered program that has already named 15 leading “smart factories” 2.
- These sites have delivered results. SAIC-GM-Wuling used an “intelligent island” system to cut body shop model changeover time by 67% 2.
The goal covers factories and the wider industrial ecosystem
- The strategy targets whole supply chains rather than single companies.
- The 15 leading smart factories have already supported coordinated upgrades among more than 1,300 upstream and downstream enterprises (suppliers and customers) 2.
- The plan also builds industrial clusters in emerging fields like aerospace, biomanufacturing (using living cells to produce materials or medicines), and quantum technology 3.
- Chinese firms already match or beat global peers in electric vehicles and wind turbines, so the policy seeks a fresh advantage in more sectors 4.
- Over the next five years, upgraded core manufacturing sectors such as chemicals, machinery, and shipbuilding could add around €1.209 trillion in new market space 4.
