China challenges America’s AI dominance

Beijing’s strategy blends technology, governance, and diplomacy to reshape the global digital future

Global artificial intelligence development has reached a decisive inflection point. Since 2023, China has accelerated its AI outreach and influence, a reflection of Beijing’s wider aspiration to play a leading role in shaping a new world order. AI is emerging as the driving force behind a new round of scientific revolution and industrial transformation. The central question – whether technology can create genuine, lasting value – has, in China’s case, been met with a confident “yes.”

China is now not only a major engine of global AI innovation but also an indispensable architect of AI governance. Its model – low cost, high performance, and open source – offers a new paradigm for global AI development, contrasting sharply with Western approaches rooted in competitive containment and proprietary advantage.

Beijing’s ambitions are not improvised. In 2017, the Chinese government issued the New Generation Artificial Intelligence Development Plan, a seminal strategic document charting a course to become the global leader in AI by 2030. By that point, China’s AI industry and related sectors are projected to be worth $1.4 trillion.

Beyond raw market size, AI is expected to play a decisive role in offsetting demographic and productivity headwinds, including an aging population and slowing growth rates. The strategic vision is clear: AI will be central to upgrading China’s socio-economic model to a more advanced, innovation-driven stage.

China’s approach rests on four critical factors: data, energy supply, computing power, and skilled labor. It already enjoys substantial advantages in three. Its enormous population generates vast quantities of data; its energy sector is rapidly expanding and diversifying; and its labor force is highly qualified, particularly in science, technology, engineering, and mathematics. The weakest link remains computing hardware – where Western export controls have sought to constrain China’s progress – but here too Beijing is actively investing in self-reliance.

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The US has contained China’s AI development through export controls, blocking Beijing’s access to the most advanced chips. In July 2025, the Trump administration unveiled its own AI strategy, Winning the Race: America’s AI Action Plan, which aims to leverage both technological superiority and policy tools to capture a larger share of the global market. The plan focuses on preserving US technological leadership and dominance rather than addressing real-world challenges or fostering economic and social development. It advocates restricting exports of American AI equipment and curbing the dissemination of Chinese AI models. The US, however, remains locked in a zero-sum mindset – pursuing the illusion that technological blockades can secure lasting AI supremacy.

China was the first country to introduce detailed, binding domestic regulations on AI. These rules form part of a mixed strategy: combining state planning with market incentives, promoting both domestic resilience and international openness. The framework underscores AI’s role not just as an engine of growth but as a pillar of national modernization, societal transformation, and global engagement.

A distinctive aspect of China’s vision is its redefinition of data as the “fifth factor of production,” alongside labor, capital, land, and technology. By treating data as a strategic national asset, China seeks to enable innovation across all sectors, coordinate infrastructure to avoid monopolistic control, and protect public interest and national security.

China’s AI strategy extends far beyond domestic development into the realm of global governance. Since 2023, Beijing has advanced an ambitious diplomatic agenda aimed at setting international norms and frameworks for AI. The Global AI Governance Initiative (GAIGI), launched in 2023, established principles such as a human-centered approach, respect for national sovereignty, adherence to international law, and equitable sharing of AI benefits. It emphasizes open-source collaboration, data security, privacy protection, and consensus-based decision-making to avoid the concentration of AI power in the hands of a few states or corporations.

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In September 2024, China unveiled the AI Capacity-Building Action Plan for Good and for All, designed to promote interoperability, enhance global connectivity – especially for the Global South – drive tangible economic outcomes, integrate AI into education, and strengthen data security. The plan even envisions a potential global data-sharing platform. In July 2025, China followed up with the Global AI Governance Action Plan, aligning its initiatives with the United Nations’ Global Digital Compact and calling for widespread adoption, harmonized standards, and environmentally sustainable development.

At the UN, Beijing has sought to anchor these efforts in formal multilateral frameworks. In July 2024, the General Assembly adopted a China-led resolution on enhancing international AI cooperation, supported by over 140 countries. Later that year, China and Zambia jointly established the Group of Friends for International Cooperation on AI Capacity-Building focused on narrowing the AI divide and strengthening the UN’s role in global AI governance.

China has also created international forums to build momentum. The World AI Conference (WAIC), inaugurated in 2024, adopted the Shanghai Declaration on Global AI Governance. The 2025 edition not only released the global action plan but also proposed the creation of a Global AI Cooperation Organization, tentatively headquartered in Shanghai. This body would focus on joint governance of AI, bridging digital and data divides, and shaping consensus-based global rules – particularly reflecting the needs and aspirations of the Global South.

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While state policy sets the strategic framework, much of China’s AI progress is being delivered by private enterprises. Among the country’s so-called “Six Tigers” – leading AI startups – recent breakthroughs have challenged Western dominance in large language models. One standout, Z.ai, released its GLM-4-Plus model in 2024, matching the performance of OpenAI’s GPT-4o. Its 2025 follow-up, GLM-4.5, not only exceeded Western benchmarks and domestic competitors like DeepSeek but did so at significantly lower cost, undermining the logic of Washington’s chip restrictions. In July, Alibaba-backed Moonshot launched its Kimi K2 model, a low-cost, open-source large language model that outperformed ChatGPT in several benchmarks.

One of the most striking differences between the Chinese and Western models lies in their approach to intellectual property and access. While leading US firms often guard their technologies behind proprietary walls, China has increasingly embraced open-source frameworks – especially for foundational AI models. Domestically, this lowers entry barriers for startups and researchers; internationally, it strengthens China’s appeal as a partner for developing nations.

China’s model offers a vision of AI as a tool for bridging divides rather than deepening them. By aligning AI development with modernization goals, integrating it into education and industry, and promoting it through global governance frameworks, Beijing is positioning itself as both a technological and normative leader. Computing capacity remains a strategic vulnerability, and questions persist about the balance between state control and innovation freedom. Yet, the direction is clear: China’s AI strategy is purposeful, coordinated, and designed for the long term.

As AI becomes a defining factor in economic competitiveness, national security, and global governance, the choices made today will shape the international order for decades. The United States continues to pursue a strategy grounded in maintaining technological dominance through restriction and exclusion. China, in contrast, presents itself as a proponent of inclusion, open-source collaboration, and multilateral governance – though always within a framework that safeguards its national interests.

Whether Beijing’s approach will become the dominant global model remains to be seen. But its growing technological capabilities, diplomatic outreach, and emphasis on equitable and shared development suggest that the competition for AI leadership is no longer a foregone conclusion. The rise of models such as GLM-4.5 and Kimi K2 underscores that the AI race is not a one-horse contest – and that innovation can thrive outside Silicon Valley’s orbit. In a multipolar world, the future of AI will be shaped not by a single hegemon but by a complex interplay of technological, political, and ethical choices. China’s bid to make AI a bridge rather than a barrier offers one possible – and increasingly influential – path forward.