China's Artificial Intelligence Is Leading in the Truly Critical Race
Lianhe Zaobao 2026-11-03
Felicia Tan
The author is a partner at TSMP Law Corporation.
Translated into Chinese by Huang Jinshun
In Tianjin, a half-hour high-speed train ride from Beijing, a librarian had just taken a book off a shelf when a robot told her where it should be returned. I was standing just a few feet away at the time and almost failed to notice the incident.
The robot, named “Zhitu”, uses radar, cameras and radio-frequency identification (RFID) sensors to pinpoint the exact floor, bookshelf and location of every book. Apart from me, no one else in the reading room even looked up at it.
Outside China, discussions about Chinese artificial intelligence (AI) are largely dominated by fear: espionage, infiltration and rogue AI agents. Yet while the rest of the world is still debating whether Chinese AI can be trusted, China has quietly begun deploying it in hotels, libraries, parks and millions of households. The next stage of the AI race will be determined less by who can develop the most sophisticated models than by who can make AI affordable, widely accessible and practical. By this measure, China is already far ahead.
### From Grand Ambitions to Everyday Applications
Three developments make this an ideal time to examine this trend. The first is DeepSeek. In January 2025, the Hangzhou-based company released its R1 reasoning model, which cost only a fraction of what American laboratories spend on research and development. Within days, it topped Apple's US App Store charts and caused Nvidia's market capitalisation to plunge by nearly US$600 billion in a single day. It demonstrated that AI that is “good enough” does not necessarily have to be expensive.
The second is an anniversary milestone. Next July will mark the 10th anniversary of the Chinese State Council's announcement of its goal of achieving an overall world-leading position in AI theory, technology and applications by 2030. Third, the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Informal Meeting will be held in Shenzhen this month, with AI on the agenda.
Today, more than 400 AI installations covering 21 categories can already be found in Shenzhen's parks, ranging from smart gyms that serve as personal trainers to drone deliveries and unmanned convenience stores.
In Xiamen, hotel robots deliver meals to guest rooms and summon lifts. These robots have become so widespread that the government of Tong'an District in Xiamen issued guidelines in April this year governing robot food deliveries. The guidelines cover food safety and stipulate a delivery time limit of 15 minutes.
In living rooms, all it takes is a call of “Xiao Ai Tong Xue” to bring a vibrant Chinese household to life. As of June this year, Xiaomi's voice assistant had more than 150 million monthly active users. It can control over 5,000 types of products, allowing even an old air-conditioner to become part of a voice-controlled smart home system without having to be replaced. All this can usually be achieved with a smart speaker costing about US$15.
In Europe and North America, people are still treating AI as something that is coming, a disruptive force that needs to be regulated. But in China, AI has already become a reality.
### Why China's Widespread Adoption of AI Matters
Why should people outside China pay attention to these developments? The first reason is productivity. History rewards not only countries that invent new technologies, but also those that put them to use. Electricity truly transformed factories only after businesses reorganised their production processes around it. If AI follows the same development trajectory, the countries that put it to work fastest will reap the rewards.
The second reason is competitiveness. China's enormous domestic market allows companies to test and refine their products and reduce costs before expanding overseas. This makes them highly competitive in developing countries, where price and reliability matter far more than whether the most cutting-edge technology is being used.
However, there is a cost hidden behind low prices. When a rural household in Indonesia buys a US$15 smart speaker, it is also effectively choosing whose software will manage its home and who will control its data.
This brings us to the third reason: dependency. Once foreign AI becomes deeply embedded in businesses and public services, consumer convenience can evolve into national-level dependency. This is where the concept of “algorithmic sovereignty” comes in: a country's ability to control the algorithms, models and data that shape its economy. The same logic explains why China remains wary of American platforms and why South Korea is investing in the development of its own domestic models.
### Lessons for Governments and Businesses
Governments can learn from these developments. First, they should formulate regulations for technologies that are actually being deployed. Tong'an District's regulations on robot food deliveries were not only introduced quickly but are also easy to adjust according to practical circumstances.
Second, energy should be treated as part of AI policy. China has built more than 40 ultra-high-voltage transmission lines, while solar panels on the Qinghai-Tibet Plateau cover an area seven times the size of Manhattan.
Third, governments can become the first customers. The facilities in Shenzhen's parks and the robot in Tianjin's library are both part of public services. When governments purchase AI products, they can provide suppliers with early demand.
For businesses, “Xiao Ai Tong Xue” offers a simple lesson: when AI can upgrade users' existing devices, they will adopt it much faster than if they are asked to throw away their existing equipment.
### Risks That Cannot Be Ignored
The more deeply AI penetrates everyday life, the greater the cost when something goes wrong.
The first concern is employment. Anthropic CEO Dario Amodei has warned that AI could eliminate half of all entry-level white-collar jobs within the next one to five years. A Stanford University study found that employment among young people aged 22 to 25 in occupations most exposed to AI had declined by about 19% relative to other groups. Without learning new skills, the benefits of AI will be enjoyed by only a portion of the population.
The second concern is the environment. In 2023, data centres in the United States consumed approximately 17 billion gallons of water. According to estimates by the International Energy Agency (IEA), coal supplies nearly 70% of the electricity used by China's data centres.
The most urgent concern, however, is ensuring that AI remains under human control. In June this year, an OpenAI agent carrying out a harmless research task hacked into the Australian government's Medicare statistics portal. Experts described this as the first known incident of a rogue AI agent breaching a government system. However, OpenAI did not inform the authorities in Canberra until September.
Following the incident, Singapore's Coordinating Minister for National Security and Minister for Home Affairs, K. Shanmugam, demanded that major AI companies must “immediately ensure full transparency”. Even OpenAI CEO Sam Altman issued a warning at the United Nations Security Council in September this year: “We may be handing over control of the future to AI.”
I share these concerns as well. But this technology is irreversible, so we must find ways to make it safer. The first step is to establish independent testing mechanisms and ensure timely disclosure when problems arise.
### Cooperation Is Better Than Confrontation
The more countries depend on AI, the more they want to control it. However, AI risks do not respect national borders: whether it is rogue agents, highly polluting data centres or disruptions to the job market, none of these challenges can be tackled by any single government alone.
China has taken a step towards competing for global leadership. In July this year, the World Artificial Intelligence Cooperation Organization, comprising 29 member countries, was established in Shanghai. Although none of the Group of Seven (G7) countries has joined, the organisation has existed for less than four months. It is too early to conclude that it will amount to nothing.
Meanwhile, South Korea is vigorously implementing its “AI for All” initiative, relying mainly on domestically developed models to provide every citizen with free access to AI chatbots and public service agents. It plans to roll out the programme nationwide by the end of this year.
### The Truly Critical Race
People usually portray the AI race as a competition to develop the most powerful models. But China is running a different race: making AI affordable, practical and commonplace. By this measure, it is already ahead. If Western governments and businesses continue to sit on the sidelines, that would be unwise.
I originally went to Tianjin intending to write about robots. But when I left, what lingered in my mind was that librarian — she did not even raise her head when the robot beeped to alert her.
The author is a partner at TSMP Law Corporation.
Translated by Huang Jinshun
Felicia Tan
[https://zb.sg/hH44]
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