BEIJING — As artificial intelligence (AI) rapidly moves from laboratories to solve problems in factories, hospitals and supply chains, Chinese policymakers have set their sights high, anticipating the rise of a “smart economy.”
At this year’s “two sessions” of China’s top legislature and top political advisory body, the government work report, submitted to the national legislature for deliberation last week, for the first time called for creating new forms of “smart economy.”
Analysts observe that China is conveying a broader message: AI is no longer merely a tool for improving efficiency, but has become a driver ushering in a new stage of economic development.
From ‘AI plus’ to ‘smart economy’
This wording in the key document marks a progression in policy thinking. In 2024, the government work report first introduced the “AI Plus” initiative, while the 2025 report advocated for its continued advancement. This year, it has moved further, framing AI as an engine of a broader economic transformation.
Zhou Li’an, a member of the 14th National Committee of the Chinese People’s Political Consultative Conference and a professor at Peking University’s Guanghua School of Management, said the phrase “smart economy” reflects a profound shift in how AI is positioned in policy thinking.
“The idea of a smart economy suggests that AI itself is increasingly becoming a foundational element of the economic system, shaping how resources are allocated, industries organized and services delivered,” he noted.
In practical terms, this year’s report outlines how this transition might unfold. It calls for faster application of new-generation intelligent terminals and AI agents, large-scale commercial application of AI in key sectors and fields, and the cultivation of new forms and models of AI-native business.
It also emphasizes strengthening open-source AI ecosystems, expanding public cloud services, improving national coordination of computing power and building hyper-scale intelligent computing clusters. New infrastructure like satellite internet and upgraded 5G Plus Industrial Internet Initiative is also highlighted.
Taken together, these measures suggest that China’s AI strategy is entering a more comprehensive phase. Rather than focusing mainly on technological breakthroughs, policymakers are now underscoring the integration of AI with the real economy — from manufacturing and agriculture to public services and consumer markets.
This broader orientation is reinforced in the draft outline of the 15th Five-Year Plan (2026-2030), which calls for advances in areas such as multimodal systems, AI agents, embodied AI and swarm intelligence.
Behind these policies lies a clear economic logic. The “smart economy” can be seen as the next stage in the evolution of the digital economy. While digitalization centers on building networks, platforms and data flows, AI introduces systems capable of perception, decision-making and autonomous action.