For years, artificial intelligence (AI) has largely been viewed as technological break-throughs, algorithmic benchmarks and limited commercial applications. However, for the first time, the 2026 Government Work Report has introduced the goal of creating new forms of the smart economy. To industry insiders and foreign investors, this significant linguistic shift signals a clear message – that AI in China is moving beyond the lab and simple “tool empowerment” to become the foundational architecture for industrial growth and systemic economic development. This evolution represents a profound opportunity. As the world’s second-largest economy pivots, the emergence of the smart economy – encompassing everything from AI-native software to embodied robotics – is poised to become a primary driver of new growth, offering opportunities for both domestic and foreign corporations.
Chen Changsheng, Deputy Director of the Research Office of the State Council, provided the official interpretation of this new terminology. “By proposing to create new forms of smart economy for the first time, we aim to seize the opportunities presented by AI development and expand the breadth and depth of AI empowerment across all industries,” Chen said. This shift reflects the recognition that AI has the potential to deliver tangible economic output at scale.
Liu Qingfeng, Chairman of iFlytek – a pioneer in intelligent speech and AI technologies – said he was impressed by the introduction of new forms of smart economy. He emphasized that AI development must be rooted in real-world demands. “I believe we need to develop AI that is truly rooted in the needs of both production and daily life, namely AI that addresses real demands, brings tangible benefits to the people and provides concrete help to industrial development. AI should be inclusive, allowing everyone to stand on the shoulders of this technology,” he added. Among the most tangible manifestations of this smart economy push is the rapid advancement of humanoid robotics. Chinese companies have already unveiled over 300 types of humanoid robots, accounting for more than half of the world’s total.
Lei Jun, Founder of Xiaomi, described humanoid robots as a potential “disruptive product” following computers, smartphones and new energy vehicles (NEVs). He positioned them as a cornerstone of China’s “new quality productive forces”, highlighting their transformative potential for the economy. According to a forecast by Morgan Stanley, China’s annual shipments of humanoid robots could exceed 2.6 million units by 2035, with the market surpassing CNY140 billion and eventually reaching a trillion-yuan scale. However, Lei was candid about the challenges that lie ahead on the path from laboratory wonder to factory floor workhorse. While acknowledging that China has built a first-mover advantage in humanoid robotics technology, he cautioned that the sector faces a critical bottleneck. “More efforts are needed to expand application scenarios in smart manufacturing to significantly increase the utilization rate of humanoid robots, moving them from experimental phases to large deployment on production lines,” Lei said. His remarks underscore a key policy imperative: bridging the gap between technological capability and industrial application.
Qi Xiangdong, Chairman of cybersecurity firm Qi-Anxin Technology Group, views the smart economy as a gateway to immense potential. He believes it will unleash enormous demand for application scenarios, fueling a new leap in economic and social development. The policy rhetoric is firmly grounded in industrial reality. In the past year, down- loads of Chinese open-source large language models topped global charts. More critically, by the end of 2025, the adoption rate of AI technology among manufacturing enterprises with a revenue of more than CNY20 million had exceeded 30%. The Government Work Report called for faster application of new-generation intelligent terminals and AI agents, and encouraged large-scale commercial application of AI in key sectors and fields, so as to foster new forms and models of AI-native business. This is widely seen by the industry as the next major frontier for AI application. the China Daily reports.
