China Makes AI the Backbone of its Economy in a Five-Year Development Plan

China has released its latest five-year policy plan, which places artificial intelligence as the backbone of the transformation of the economy. The document was announced alongside the opening of the National People’s Congress, China’s parliament.

The government underscored its ambition to ‘take a leading position in the development of science and technology’ and to achieve ‘significant breakthroughs in key core technologies.’

A separate report from the state planning agency said China has surpassed several rivals in AI research and development.

‘China now leads the world in research, development and applications in areas such as AI, biomedicine, robotics and quantum technology, and new breakthroughs have been achieved in independent chip R&D,’ the report said, as reported on Thursday (5 March 2026).

The focus relates to structural pressures facing China. An ageing population and a declining labour force pose long-term challenges.

Competition with the United States in mastering core technologies has also tightened. Domestic AI model developers such as DeepSeek are noting rapid progress.

The plan includes trials of robot use in sectors with labour shortages. The government is also promoting the deployment of AI agents capable of performing tasks with minimal human guidance.

‘Beijing’s objective is to use AI and robotics to boost productivity and performance across sectors, from manufacturing and logistics to education and healthcare,’ said Kyle Chan of the Brookings Institution.

The strategy also relates to the long-standing dependence on American technology, such as chips and aircraft.

Trade tensions have led the two countries to curb exports. Washington restricts advanced chips. Beijing retaliates with restrictions on rare earths and other critical minerals.