China bets on AI to drive economic recovery and growth by 2035

China sees artificial intelligence (AI) as a new engine of growth and, with nationwide efforts to expand computing power and create a unified data market, it is estimated that AI could add several trillion yuan to the economy by 2035.

According to the South China Morning Post (SCMP), Beijing is building a national computing network. At the China Computing Power Conference held over the weekend in Datong, Shanxi province, officials announced that 10 provinces and municipalities—from Shanghai and Zhejiang in the east to Qinghai and Xinjiang in the west—have joined a unified platform designed to match business demand with underused regional resources.

State broadcaster CCTV reported that more than 100 service providers, 1,000 industry users, and around 100 AI models have already registered on the platform.

A report published earlier this year by International Data Corporation (IDC) and Inspur Information highlighted China’s heavy investments in computing power over the past five years. Intelligent computing capacity is expected to grow by 43% in 2024 alone.

As part of its push for self-reliance, China has invested significantly in data centers and chips, increasing total computing capacity by roughly 30% annually. Between 2023 and 2028, intelligent computing capacity is forecast to expand at an average annual rate of 46.2%, compared with 18.8% for general-purpose computing.

At the conference, Rao Shaoyang, director of the China Academy of Information and Communications Technology, said that AI could contribute 11 trillion yuan ($1.58 trillion) to China’s GDP by 2035. This would account for 4–5% of total output and could drive a tenfold—or even hundredfold—increase in demand for computing power.

AI has become a critical battleground in the rivalry between China and the US, as Washington seeks to curb Beijing’s growing technological capabilities.

Earlier this year, Chinese company DeepSeek shook the tech industry with a low-cost, high-performance large language model that rivals, and in some respects surpasses, America’s ChatGPT.