Beijing

In brief

China has set targets for AI adoption, seeking 70% penetration by 2027 and 90% by 2030.
The policy mandates integration of AI across industry, governance, and public services.
The move underscores Beijing’s bid to outpace Western rivals in artificial intelligence.

China is aiming to achieve a 70% penetration rate of AI technologies within the next couple of years, enabling its population to utilize “next-generation smart terminals, intelligent agents, and other applications” by 2027, according to a State Council directive that sets the country’s most ambitious artificial intelligence targets to date.

The policy aims to “reshape modes of production and everyday life” and “enable a revolutionary leap in productive forces,” mandating the integration of AI across technology, industry, consumption, governance, welfare, and international cooperation.

By 2030, penetration rates are expected to reach 90%, with a complete transition to an “intelligent economy and intelligent society” by 2035, according to the council.

Meeting the 2027 target means that 980 million Chinese citizens will regularly use AI-powered devices or services. For context, China’s smartphone penetration hit 70% in 2018, eight years after the iPhone’s local launch. Beijing expects similar AI adoption within the next three years.

These targets far exceed Western timelines. The U.S. National AI Initiative Act contains no concrete adoption mandates. The EU’s AI Act focuses on risk management rather than deployment.

Meanwhile, other nations are scrambling to keep pace.

Canada boosted its AI strategy this year. Taiwan has also published a plan to generate over $510 billion in AI technology by 2040. Egypt’s Digital Builders program, backed by Microsoft and Amazon, aims to train 100,000 AI specialists by 2030.

The aggressive timeline builds on existing momentum from Chinese AI companies like DeepSeek, whose models already power various applications, including Shenzhen’s surveillance systems, voice controls in Geely vehicles, and diagnostic tools in nearly 100 hospitals.

Longgang County, one of nine districts in Shenzen, cut administrative approval times by 90% after adopting Deepseek’s AI. The startup has been successful despite U.S. export restrictions, which are specifically designed to prevent China from winning the AI war with American hardware.

The State Council’s directive calls for “AI-native enterprises whose underlying architectures and operating logic are based on AI” and encourages enterprises to incorporate artificial intelligence into strategic planning.

It also calls for promoting “intelligent interconnection of everything” across smart terminals and product ecosystems.

The Chinese policy promises to “help Global South countries build AI capabilities” through open-source technology and computing resources, positioning Beijing as an alternative to models presented by the West. It specifically mentions “treat[ing] AI as an international public good for the benefit of humankind.”

Industrial applications include “intelligent agricultural equipment such as smart farm machinery, agricultural drones, and agricultural robots” in farming, while the service sector must adopt “unmanned services” alongside human workers.

But the financial services, logistics, and legal sectors would need to undergo significant transformation to achieve such goals, not to mention the growing pains that will accompany the continued evolution of the tech.

The policy acknowledges risks including “model opacity (black-box), hallucinations, and algorithmic discrimination,” establishing governance frameworks for “natural persons, digital persons, and intelligent robots,” suggesting preparation for AI agents requiring legal status.

The State Council’s language leaves little room for interpretation: regions and departments “shall closely integrate these opinions with actual conditions” and “ensure tangible results,” it said.

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China’s growing focus on stablecoins is less about embracing crypto and more about defending its currency from U.S. dollar dominance, says Dr. Vera Yuen of Hong Kong University’s Business School, who argues the shift highlights offshore opportunities but also deep domestic limits.

Beijing’s shift comes as Washington moved first to create a regulatory framework for the stablecoin industry in the U.S. Reuters recently reported that China’s State Council is reviewing a roadmap for yuan-backed stablecoins later this month, with Hong Kong and Shanghai expected to fast-track adoption.

In an earlier interview, Animoca Group president Evan Auyang told CoinDesk the trigger was the U.S. GENIUS Act, which cements dollar-pegged tokens as part of global finance.

He said the law is “pressuring China to act a lot faster,” pushing Beijing to consider stablecoins not as speculative instruments, as once described by the People’s Bank of China, but as necessary infrastructure to keep pace in global trade and settlement.

Yuen said the government first prioritized the e-CNY, its Central Bank Digital Currency, because it offered control, traceability, and seigniorage profits — features that regulators valued over those of privately issued tokens. But she noted that stablecoins have a clear edge in international use.

“Many CBDCs are developed for domestic use, so for international use of CBDCs, there is a big problem of interoperability of different systems. Stablecoins are designed to be used internationally, so it can be a better option for cross-border transactions,” she told CoinDesk.

“Focusing on stablecoins allows China to respond proactively to global regulatory debates and technological advances, ensuring it remains competitive and prepared as the digital currency landscape evolves,” Yuen continued.

Capital controls still mean any yuan token will stay offshore, with Hong Kong’s new regime providing the testing ground. However, limited CNH liquidity underscores how narrow the runway is for China’s internationalization push.

“This would limit the issuance of offshore renminbi stablecoins, constraining its attractiveness as a means of payment,” Yuen said.

China is also not moving in isolation.

In Japan, Monex Group is preparing to issue a yen-backed stablecoin tied to government bonds, joining other domestic players such as SBI and JPYC.

Unlike China, however, where capital controls push experimentation offshore, Japan’s regulators are laying the groundwork for stablecoins to circulate at home, signaling Asia’s broader race to keep pace with U.S. dollar tokens.

For now, Beijing’s stablecoin experiment looks less like a replacement for the e-CNY and more like a cautious complement, a way to extend the yuan’s reach abroad without loosening its grip at home.

Market Movements

BTC: BTC held at $111K as Nvidia posted strong earnings.

ETH: ETH is trading at $4,500, and history shows that a green August often precedes a 60% year-end rally, though typically after a September dip.

Gold: Gold traded Wednesday at $3,443 per ounce, up 1.6% from Tuesday’s close, extending a 37% year-over-year rally, though prices slipped in early trading as attention turned to Nvidia earnings and Trump’s Fed feud.

S&P 500: The S&P 500 rose 0.2% Wednesday, pushing Wall Street to a new all-time high ahead of Nvidia’s earnings.

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