*Full Stack China's Evolving Industrial Policy for AI * /Kyle Chan, Gregory Smith, Jimmy Goodrich, Gerard DiPippo, Konstantin F. Pilz/ Expert Insights Published Jun 26, 2025 China wants to become the global leader in artificial intelligence (AI) by 2030.^[1] <https://www.rand.org/pubs/perspectives/PEA4012-1.html#fn1> To achieve this goal, Beijing is deploying industrial policy tools across the full AI technology stack, from chips to applications. This expansion of AI industrial policy leads to two questions: What is Beijing doing to support its AI industry, and will it work? China’s AI industrial policy will likely accelerate the country’s rapid progress in AI, particularly through support for research, talent, subsidized compute, and applications. Chinese AI models are closing the performance gap with top U.S. models, and AI adoption in China is growing quickly across sectors, from electric vehicles and robotics to health care and biotechnology.^[2] <https://www.rand.org/pubs/perspectives/PEA4012-1.html#fn2> Although most of this growth is driven by innovation at China’s private tech firms, state support has helped enhance the competitiveness of China’s AI industry. However, some aspects of China’s AI industrial policy are wasteful, such as the inefficient allocation of AI chips to companies.^[3] <https://www.rand.org/pubs/perspectives/PEA4012-1.html#fn3> Other bottlenecks are hard to overcome, even with massive state support: U.S.-led export controls on AI chips and the semiconductor manufacturing equipment needed to produce such chips are limiting the compute available to Chinese AI developers.^[4] <https://www.rand.org/pubs/perspectives/PEA4012-1.html#fn4> Limited access to compute forces Chinese companies to make trade-offs between investing in near-term progress in model development and building longer-term resilience to sanctions. Ultimately, despite some waste and conflicting priorities, China’s AI industrial policy will help Chinese companies compete with U.S. AI firms by providing talent and capital to an already strong sector. China’s AI development will likely remain at least a close second place behind that of the United States, as such development benefits from both private market competition and the Chinese government’s investments. [...] continua qui: https://www.rand.org/pubs/perspectives/PEA4012-1.html