China’s AI-Driven Manufacturing Push to Close Digital Economy Gap with US
China is setting ambitious goals for its digital economy, aiming to have it contribute 12.5 per cent of the country’s gross domestic product by 2030. This target reflects Beijing’s broader strategy to develop a modern industrial system that relies heavily on advanced manufacturing. The goal represents a notable increase from the 10.5 per cent share achieved in 2025, which was announced during the annual “two sessions” parliamentary meetings and surpassed initial expectations.
A significant portion of China’s digital economy, which includes activities driven by data, the internet, and artificial intelligence, is expected to be fueled by its integration with the manufacturing sector. This approach underscores the government’s commitment to leveraging digital technologies to enhance productivity and efficiency across industries.
The nation’s 15th five-year plan, outlined during the two sessions and covering the period up to 2030, includes 28 major projects focused on strengthening industrial foundations and competitiveness, fostering emerging industries, advancing frontier technologies, and enhancing innovation capacity.
Premier Li Qiang emphasized the importance of building a modern industrial system with advanced manufacturing as its backbone during the opening session of the National People’s Congress. He stated that China must pursue greater self-reliance and strength in science and technology, strengthen original innovation, and make breakthroughs in core technologies in key fields while advancing the development of a digital China.
This year, the government plans to upgrade 5G networks and connect factory equipment to enable more automated, digitalized, and intelligent production systems. Additionally, efforts will be made to develop national advanced manufacturing clusters.
Better utilization of data resources is also a priority. Li Qiang highlighted the need to improve the fundamental systems for data as a production factor and to construct high-quality data sets.
Qi Xiangdong, who participated in the two sessions as a member of the Chinese People’s Political Consultative Conference, noted that China’s digital economy has advanced faster than that of the United States in some areas. He pointed to the formation of the National Data Administration in 2023, stating that China was the first to recognize data as a production factor.
“The level of data concentration and collection volume in China leads the world,” said Qi, who is chairman of Qi An Xin Technology, a cybersecurity company. He added that AI development fundamentally depends on a robust data industry.
Furthermore, Qi mentioned that China’s manufacturing sector provides an excellent foundation for the future development of AI, especially as the tech sector rapidly expands into physical applications such as robotics.
By expanding its digital economy, China aims to narrow the gap with the US, whose digital economy accounted for about 18 per cent of GDP, according to a 2025 report by the Interactive Advertising Bureau, an American advertising business organisation.
China’s digital economy has already surpassed that of Germany, the world’s third-largest economy. In 2024, Germany’s digital sectors comprised 5 per cent of GDP, based on data from both the German government and the US International Trade Administration.
