Xi Jinping has made it clear: China’s technological future runs through AI and chips. The Chinese president has repeatedly emphasized developing domestic capabilities in both sectors, describing 2025 as a year of breakthroughs during his New Year’s address on January 1, 2026.
What China is actually building
By the end of 2025, China’s core AI industry had grown to include over 6,200 enterprises with a combined market value surpassing 1.2 trillion yuan, roughly $165 billion at current exchange rates.
The strategic blueprint is the 15th Five-Year Plan covering 2026 through 2030, which positions AI as a central pillar for industrial transformation. As of April 2025, Xi urged a sharper focus on basic research to strengthen high-end chip development, with the explicit goal of building an independent AI infrastructure.
New policies are already directing Chinese firms toward domestic chip alternatives, particularly those linked to Huawei, rather than imported US options like Nvidia’s H200. Even when US semiconductor exports receive government approval, Chinese policy continues to prioritize homegrown solutions.
