China wants artificial intelligence to become a new engine of growth, powering everything from factory upgrades to scientific discovery. But outside the country’s technology hubs, the economic benefits promised by AI may be harder to realise.
Recent studies suggest that AI will widen regional divides. Big cities with deep pools of talent, capital and innovative firms are best placed to adopt the technology, while smaller cities and rural areas may struggle to keep up.
Advertisement
According to analysts, the emerging divide could exacerbate regional inequality in China, where wealth is largely concentrated along the coast, even as Beijing seeks to build a more equitable society under the banner of “common prosperity”.
“Inevitably, we will see that the gains are not equal,” said Lynn Song, chief economist for Greater China at ING. “Those who are most directly connected to the core parts of China’s AI supply chain will benefit more.”
The capital, Shanghai and Shenzhen are expected to be clear beneficiaries. These cities already possess large technology clusters, strong universities and local governments with the resources to back new industries, according to Liam Sides, an associate director at Oxford Economics.
China’s leaders have made clear that they want AI to become a new economic driver across the economy.
Advertisement
China’s “AI-plus” plan, launched in August 2025, aims to accelerate the application of AI across industry and society. During the annual “two sessions” meetings in March, policymakers set a target for the digital economy to account for 12.5 per cent of gross domestic product by 2030, up from 10.5 per cent in 2025.