Artificial Intelligence, China’s Rise and Implementation Implications
In their article, Khanal, Zhang, and Taeihagh (2025) offer a critical examination of China’s AI development strategy, highlighting the interplay between national ambitions and local realities. The study situates China’s artificial intelligence (AI) trajectory within a broader geopolitical and economic context, particularly in relation to its competition with the United States. While previous studies have largely focused on Beijing’s top-down AI policies, this article innovatively foregrounds the role of local governments in shaping AI development.
Through a systematic content analysis and fuzzy-set Qualitative Comparative Analysis (fsQCA), the authors investigate the diffusion of the 2017 New Generation Artificial Intelligence Development Plan (NGAIDP) at the provincial level. The study provides empirical evidence of varying AI policy adoption speeds, investment strategies, and economic priorities across Chinese provinces, offering a more granular understanding of China’s AI ambitions beyond centralized policy rhetoric.
Cultural Aspects: The Central-Local Policy Divide
The article reveals a cultural divergence between the Chinese central government’s global AI aspirations and local governments’ focus on economic development. While Beijing’s narrative positions AI as a means to enhance national security and geopolitical competitiveness, provincial governments prioritize economic modernization, industrial applications, and regional growth.
This divergence echoes broader debates in Chinese political science regarding central-local relations (Zeng, 2021). The findings align with scholarship on China’s fragmented authoritarianism (Lieberthal & Oksenberg, 1988), which argues that local officials often reinterpret central mandates to suit regional interests. This dynamic reflects the complexity of governance in China, where directives from Beijing are often adapted to fit local realities.
Economic Aspects: AI as an Engine for Growth
The study highlights AI’s role as a critical driver of China’s economic transformation. China leads globally in AI-related patents and research publications, but its progress is uneven across provinces. Wealthier regions such as Beijing, Shanghai, and Guangdong are at the forefront, while less-developed provinces struggle to integrate AI due to limited financial and technological resources.
A key economic finding is that many provincial governments have set higher AI investment targets than the central government, signaling a decentralized push for AI-driven economic growth. This supports research by Ding (2018), who suggests that China’s AI boom is driven as much by local entrepreneurship and investment as by national policy.
However, the authors also highlight economic disparities in AI adoption. Some provinces, such as Guangxi, leverage AI to strengthen economic ties with ASEAN countries, while others lag behind due to weak private-sector involvement. This reinforces arguments by Ang (2018) that China’s economic policies are diffused unevenly, with wealthier regions benefiting disproportionately.
Political Aspects: AI as a Strategic and Security Priority
At the political level, the authors frame AI development as a crucial element of China’s global ambitions. The central government’s NGAIDP (2017) aims to position China as an AI superpower by 2030, but this national vision is not uniformly embraced by all provinces. While Beijing, Shanghai, and Guangdong actively pursue global leadership in AI, many provinces remain focused on local industry development.
The article engages with debates on China’s AI-driven governance model (Zeng, 2020). While the central government sees AI as a tool for enhancing national security, local governments tend to emphasize economic benefits over security concerns. This suggests that while AI may serve as a strategic asset in Beijing’s geopolitical competition with the U.S., its implementation at the local level is shaped more by economic pragmatism than national security priorities.
Social Aspects: AI’s Role in Society
The study also explores AI’s social implications in China, particularly its uneven diffusion across regions. Some provinces, like Shaanxi and Sichuan, focus on AI’s defense applications, while others, like Anhui and Zhejiang, prioritize AI-driven service industries. This reflects broader concerns about AI’s role in exacerbating regional inequalities and the digital divide in China (Song & Xia, 2019).
Moreover, the article discusses AI’s impact on employment, governance, and social services. AI investments in wealthier provinces have led to job creation and industrial transformation, while less-developed regions face challenges in workforce retraining. These findings align with studies on AI-induced labor market shifts (McKinsey Global Institute, 2018), which predict that AI will disproportionately benefit urban centers with high technological capacity.
Integration with Scholarly Literature
The article contributes to several academic discussions:
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AI Policy Diffusion: It builds on policy diffusion literature by examining how AI policies spread from the central government to local governments. Unlike Western models of policy diffusion, which emphasize horizontal transfer (Shipan & Volden, 2008), China’s AI diffusion follows a vertical and selective adaptation process.
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Central-Local Relations in China: The findings align with research on China’s decentralized economic governance (Cai & Treisman, 2006). While AI policy is centrally mandated, its implementation depends on local economic conditions and political incentives.
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AI and Geopolitics: The study engages with discussions on AI’s role in U.S.-China competition (Allen, 2019). It suggests that while Beijing views AI through a geopolitical lens, local governments prioritize practical economic benefits.
Conclusion and Implications
Khanal et al. (2025) provide a nuanced perspective on China’s AI development, demonstrating how local governments navigate central mandates while pursuing their own economic interests. The study challenges the perception of China’s AI strategy as a monolithic state-led effort, revealing a more complex reality shaped by provincial capacities, economic disparities, and policy priorities.
The findings have several implications:
- For Policy-Makers: Understanding local variations in AI adoption can help refine national strategies to better support lagging provinces.
- For Global AI Competition: The study suggests that while China is advancing rapidly in AI, internal disparities could affect its ability to achieve global dominance.
- For Researchers: Future studies could explore how AI policy diffusion in China compares with other authoritarian and democratic governance models.
References
Allen, G. C. (2019). Understanding China’s AI strategy: Clues to Chinese strategic thinking on artificial intelligence and national security. Center for a New American Security.
Ang, Y. Y. (2018). Domestic flying geese: Industrial transfer and delayed policy diffusion in China. The China Quarterly, 234, 420-447.
Cai, H., & Treisman, D. (2006). Did government decentralization cause China’s economic miracle? World Politics, 58(4), 505-535.
Ding, J. (2018). Deciphering China’s AI dream. Future of Humanity Institute.
Khanal, S., Zhang, H., & Taeihagh, A. (2025). Development of new generation of artificial intelligence in China: When Beijing’s global ambitions meet local realities. Journal of Contemporary China, 34(151), 19-42. https://doi.org/10.1080/10670564.2024.2333492
Lieberthal, K., & Oksenberg, M. (1988). Policy making in China: Leaders, structures, and processes. Princeton University Press.
McKinsey Global Institute. (2018). Jobs lost, jobs gained: Workforce transitions in a time of automation.
Shipan, C. R., & Volden, C. (2008). The mechanisms of policy diffusion. American Journal of Political Science, 52(4), 840-857.
Song, W., & Xia, H. (2019). A quantitative study on the text of local government artificial intelligence industry policy. Science Technology Management and Research, 39, 192.
Zeng, J. (2020). Artificial intelligence and China’s authoritarian governance. International Affairs, 96(6), 1441-1459.
[Edited by Pablo Markin. The initial draft has been generated using ChatGPT, OpenAI (February 12, 2025).]
OpenEdition suggests that you cite this post as follows:
Pablo Markin (February 12, 2025). Artificial Intelligence, China’s Rise and Implementation Implications. Open Economics Blog. Retrieved March 24, 2025 from https://doi.org/10.58079/13b3c