China Accelerates AI Adoption, Focuses on Domestic Innovation

China is prioritizing rapid adoption and integration of AI across its domestic economy, with policymakers emphasizing technological self-reliance and large-scale application over competing for artificial general intelligence breakthroughs. Recent initiatives, such as the Yizhuang Development Zone, demonstrate major investments in building a Chinese-driven AI ecosystem using exclusively domestic technology, including semiconductors and RISC-V architecture, to reduce reliance on foreign suppliers. Chinese internet giants like Alibaba, Baidu, and Tencent are driving AI innovation by offering affordable large language models and platform-specific AI tools, enhancing cloud computing demand and digital experiences. These efforts reflect a broader national strategy to accelerate AI diffusion and establish China as a global leader in both AI development and international technology cooperation, particularly with Global South nations. Meanwhile, Chinese internet equities have outperformed US markets in early 2025, despite facing challenges from US tariffs. Collectively, these trends highlight China's dual focus on self-sufficiency and global influence in the AI sector.