BEIJING—Chinese President Xi Jinping declared artificial intelligence an “epoch-making technological transformation” comparable to the steam engine, electricity and the internet, signaling Beijing’s intensified drive for technological self-reliance as the 15th Five-Year Plan kicks off in 2026. Speaking on January 20, 2026, at the Central Party School in Beijing to ministers and provincial officials, Xi positioned AI as the “most eye-catching” among frontier technologies like quantum computing and biotechnology, urging a “whole-of-nation” effort to shatter development bottlenecks in domestic tech.
“In this wave of technological revolution, frontier technologies such as AI, quantum computing and biotech are emerging. Among them, AI is the most eye-catching,” Xi said, according to a South China Morning Post report citing Xinhua. This marked his first formal meeting of the year, setting the tone for innovation-led growth amid U.S. export curbs on advanced chips and rivalry in generative models.
AI anchors China’s strategy to cultivate “new quality productive forces,” integrating cutting-edge tech into traditional industries without discarding established strengths. Xi cautioned against blind rushes: “When developing new quality productive forces, we must not blindly or recklessly rush in all at once… we should not ‘abandon the old in favor of the new.'” Regional plans from Shenzhen to Zhejiang already embed AI, adapting national goals to local conditions.
Breakthroughs Fuel National Ambition
Xi’s rhetoric builds on 2025 triumphs hailed in his New Year’s address, where he noted AI models “competing in a race to the top” and homegrown chip advances. DeepSeek’s R1 and V3.2 models rivaled OpenAI’s o1 and GPT-5, slashing compute needs and triggering a 17% Nvidia plunge that erased $600 billion in market value, per Euronews. Alibaba’s Qwen series and Huawei’s AI chips further showcased prowess, with China’s AI chip market projected to balloon 7-9 times from $40 billion.
These feats underscore Beijing’s pivot from hardware constraints—U.S. restrictions limited Nvidia access until a December 2025 Trump-approved surcharge on H200 sales—to software efficiency and open-source dominance. Yet Xi flagged perils: “Once AI is used improperly, it will give rise to disinformation and data theft [that] we may lose control [of].” Early safeguards are imperative, he stressed, amid European bans on DeepSeek over data risks.
The 15th Five-Year Plan, approved in outline at the 20th CPC Central Committee’s fourth plenum in October 2025 and set for full rollout by March 2026, formalizes AI as a pillar for “high-quality development” toward socialist modernization by 2035, as detailed in Xinhua.
Self-Reliance Amid Global Rivalry
Xi’s January directive echoes plenum recommendations for “AI Plus” initiatives across industries, boosting venture capital for SMEs and elevating basic research funding above 10% of total R&D, per Deloitte estimates cited in Euronews. Provinces diverge strategically: Guangdong eyes AI-robotics scale-up, Shanxi targets energy fusion, Henan embeds it in manufacturing—unified under national mandates yet tailored locally.
U.S.-China tensions amplify urgency. While Trump eased some chip curbs, Xi’s “whole-of-nation” call redoubles indigenous pushes, shunning imports from non-approved suppliers like Cambricon and Huawei. This counters export pressures, with China’s 2025 GDP hitting 140 trillion yuan ($20 trillion) despite property woes and youth unemployment, meeting 14th Plan targets.
Officials like Premier Li Qiang reinforce: promote high-quality development via modern infrastructure and human capital investment, per Xinhua. Xi personally shaped the plan, per The Economist, prioritizing advanced manufacturing and green tech alongside AI to sustain a “reasonable share of manufacturing.”
Risks and Regional Execution
Warnings dominate: Xi decried provincial spending races yielding idle data centers, echoing July 2025 national directives to offload surplus capacity. “New tech must empower all industries,” he said, mandating prudence to avert excess and misuse. Europe’s DeepSeek bans highlight global scrutiny, even as Meta snapped up Chinese-rooted AI talent for $2 billion.
Science and Technology Minister Yin Hejun outlined four sci-tech thrusts for 2026-2030: accelerate self-reliance, forge new productive forces, integrate innovation with industry, and build data markets—spotlighting AI, per Xinhua. This includes efficient computing power, algorithms and data supply, fusing digital and real economies.
Local blueprints proliferate: Beijing and Zhejiang fuse AI with research; Chongqing builds open-source auto ecosystems. Such divergence, aligned centrally, aims to unlock consumption via equipment renewal and service upgrades, countering demographic headwinds.
Global Ripples from Beijing’s Blueprint
China’s AI surge challenges U.S. primacy, with Xi rejecting “Cold War mentality” in tech. The plan’s March 2026 finalization will detail metrics, but signals abound: quantum, biotech, brain-computer interfaces join AI as “industries of the future.” R&D surges target chokepoints like semiconductors, per Chatham House analysis.
Export resilience persists—5.5% growth yielded a $119 billion surplus—bolstered by AI-driven upgrades. Yet Xi eyes internal circulation: “Domestic economy should serve as the mainstay.” This balances security with development, per plenum communique.
For industry insiders, Xi’s vision demands vigilance: Beijing’s coordinated might—fiscal expansion, policy continuity—positions China to lead AI adoption, even if hardware lags. As Xi put it, at “major historical junctures,” the party strengthens study for breakthroughs.
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