China's AI Ecosystem Enters Phase of Quantitative Expansion

The number of artificial intelligence (AI) companies in China surpassed 5,300 as of September 2025. This figure, announced by the China Academy of Information and Communications Technology (CAICT), represents 15% of global AI companies. According to Xinhua News Agency, China's AI industry scale exceeded 900 billion yuan (approximately $126.7 billion) in 2024, growing 24% year-over-year.

Complete Production Chain, Divergent Growth Rates

China has now established a complete production chain for the AI industry. The structure encompasses all areas from basic infrastructure to model architecture and industrial applications.

Looking at 2024 revenue growth rates by sector:

• Basic infrastructure: 54% increase
• Model architecture: 18% increase
• Industrial applications: 13% increase

The basic infrastructure sector shows overwhelming growth. This demonstrates China's focus on hardware investments such as GPU chips and data centers. Meanwhile, the application sector—which applies AI to actual industrial settings—shows relatively lower growth, suggesting a gap between technology and practical use.

'AI Plus' Policy Drives Expansion Across Society

The Chinese government announced 'AI Plus (AI+)' initiative guidelines in early 2025. This policy aims to strengthen AI infrastructure while rapidly integrating AI technology across all social and economic sectors.

CAICT stated, "We continue efforts to transform the digital economy into an intelligent economy and intelligent society." This reveals the government's intent to expand AI application scope to public sectors including manufacturing, healthcare, education, and administration.

China's Position in Global AI Competition

Holding 15% of global AI companies, China is evaluated as the world's second AI powerhouse after the United States. However, given that leading generative AI companies like OpenAI, Google, and Anthropic are all U.S.-based, analyses suggest China still relies more on economies of scale than technological innovation.

China is pursuing a strategy focused on rapid commercialization and data accumulation by leveraging its domestic market size. The figure of 5,300 companies is not merely a quantitative indicator but signifies that China's AI ecosystem has already diversified into various fields.

Future Outlook [AI Analysis]

China's AI industry is likely to shift its center of gravity from infrastructure investment to application expansion over the next 2-3 years. The 54% growth in basic infrastructure is unsustainable, and the industry ecosystem can only stabilize if growth in the application sector—which creates actual business value—follows.

For the 'AI Plus' policy to succeed, balancing regulation and innovation is key. The Chinese government faces the dilemma of ensuring corporate autonomy while emphasizing AI safety and data control.

In terms of global competition, rather than narrowing the technology gap with the United States, China appears focused on building an independent AI ecosystem. Development of models optimized for Chinese-language data and domestic regulatory environments is expected to become core competitive advantages.