Li Tao and Xu Xiang: Cultivating New Drivers of Economic Development with Artificial Intelligence

The "Recommendations of the Central Committee of the Communist Party of China on Formulating the 15th Five-Year Plan for National Economic and Social Development," adopted at the Fourth Plenary Session of the 20th CPC Central Committee, pointed out the need to accelerate the innovation of digital-intelligent technologies such as artificial intelligence (AI), break through basic theories and core technologies, and strengthen the efficient supply of computing power, algorithms, and data. We must fully implement the "AI Plus" action, lead the transformation of scientific research paradigms with AI, and strengthen the integration of AI with industrial development, cultural construction, people's livelihood protection, and social governance, so as to seize the commanding heights of AI industrial applications and empower all industries in an all-round way. The 2025 Central Economic Work Conference proposed deepening and expanding "AI Plus" and improving AI governance. As a strategic technology leading the current round of scientific and technological revolution and industrial transformation, AI is not only the core engine of the digital economy, but also the strategic cornerstone for cultivating new quality productive forces and promoting high-quality development. Through deep integration with the real economy, AI is reshaping productive forces and relations of production at an unprecedented speed. Deeply understanding the mechanism by which AI cultivates economic momentum and promoting the evolution of AI toward high-quality development and social harmony is both an intrinsic requirement for the complete, accurate, and comprehensive implementation of the New Development Concept ^[1], and an inevitable choice for maintaining social fairness and justice and solidly promoting common prosperity.

1. Deeply understanding the logic of the AI transformation

AI is the core engine of new quality productive forces. AI achieves a qualitative leap in productive forces through fundamental changes in the three major elements: laborers, instruments of labor, and subjects of labor. In the era of AI, laborers are no longer merely providers of physical or simple mental labor, but have become the creators and masters of intelligent systems. Instruments of labor have expanded from traditional machinery and equipment to algorithms, computing power, and models, while subjects of labor have expanded from material resources to massive data resources. This transformation has caused a non-linear reconfiguration of the production function, providing new momentum for economic development that transcends traditional factor-input models through an explosive growth in total factor productivity. It must be deeply recognized that AI is not a single technological breakthrough, but a General Purpose Technology (GPT) that permeates all sectors of the national economy and is constructing a brand-new modern industrial system with intelligent technology at its core.

The intelligent economy is the advanced stage of the evolution of the digital economy. From a historical perspective, human economic forms have undergone leaps from the agricultural economy and industrial economy to the digital economy, and AI is driving the deep evolution of the digital economy from informatization to intelligence. The focus of the informatization stage lies in data collection and connection, while the focus of the intelligence stage lies in the deep mining of the value of data elements and automated decision-making. This evolution means that the logic of economic operation is shifting from human-machine collaboration to human-machine integration, and the circulation efficiency of social reproduction will be greatly improved. Through deep learning and pattern recognition of complex systems, AI can predict market fluctuations, optimize resource allocation, and even autonomously drive research and development, marking that human society is entering a new stage capable of automatically creating knowledge and autonomously improving efficiency. This evolution brings both an expansion of the scale of wealth creation and a boost to the optimization of growth patterns.

Scientific and technological innovation must submit to the overall situation of high-quality development. The core purpose of cultivating new economic momentum lies in meeting the people's ever-growing needs for a better life and achieving effective qualitative improvement and reasonable quantitative growth of the economy. The development of AI cannot be detached from the fundamental goals of social harmony and common prosperity. In the dynamic evolution of factor substitution and structural optimization, although the introduction of AI may impact traditional employment structures in the short term, in the long run, it can provide more creative and higher value-added jobs for society by creating new demand and opening up new tracks. On the New Journey ^[2], we must adhere to the people-centered development philosophy, combine the efficiency advantages of AI with the institutional advantages of the socialist system, and ensure that the dividends of technological progress are not monopolized by a few groups but are transformed into a realistic driving force for solidly promoting common prosperity and maintaining social fairness and justice by building an inclusive governance framework.

2. Fully releasing the potential of AI momentum

Stimulating the potential of internal demand with AI. General Secretary Xi Jinping emphasized: "Expanding internal demand is related to both economic stability and economic security; it is not a temporary expedient, but a strategic move." The 2025 Central Economic Work Conference placed "adhering to the dominance of internal demand and building a strong domestic market" at the top of the key tasks for economic work in 2026. Demand is the source of power for economic growth. By creating new consumption scenarios and reducing transaction costs, AI has achieved a substantial expansion of the scale of internal demand. According to data from the National Bureau of Statistics, in the first half of 2025, China's online retail sales of physical goods accounted for 24.9% of the total retail sales of social consumer goods, behind which is the precise capture and instant matching of users' potential needs by various intelligent recommendation algorithms. In terms of model innovation, AI has expanded the breadth of service consumption through new business forms such as smart travel, online education, and telemedicine, and has made it more convenient for small, medium, and micro enterprises and individual laborers to connect with market demand by reducing information asymmetry in the market.

Improving the quality of supply with intelligent technology. The core of supply-side structural reform lies in improving the quality and efficiency of the supply system, and AI has achieved a systemic optimization of the supply system through the improvement of total factor productivity. The wide application of digital, networked, and intelligent tools has broken the strict restrictions of space and time on production under the traditional industrial model, endowing production organizations with greater flexibility. In the list of "Lighthouse Factories" selected by the World Economic Forum, the intelligent practices of Chinese enterprises have become global benchmarks. In addition, through the intelligent transformation of production processes, AI has realized a shift from experience-driven to data-driven, significantly shortening product R&D cycles. This optimization of the supply side, while accelerating the high-end and knowledge-based transformation of physical products, also promotes the transfer of labor to high-cognitive and innovative positions, thereby enhancing the human capital value of the entire supply side.

Continuously opening up growth space with digital technology. Improving the quality of economic increments requires that we seize the opportunities for the development of future industries, and AI is precisely the fertile soil for spawning new industries, new business forms, and new models. According to calculations by the China Academy of Information and Communications Technology (CAICT), the scale of China's core AI industry exceeded 900 billion yuan in 2024, a year-on-year increase of 24%. As of September 2025, the number of AI enterprises exceeded 5,300, accounting for 15% of the world's total, forming a complete industrial system covering basic foundations, model frameworks, and industry applications. AI has led a series of business models such as the platform economy and the sharing economy, creating entirely new professional categories such as virtual reality engineers, algorithm optimizers, and data labelers. These new positions are large in scale and diverse in type, effectively absorbing labor and playing the role of an "employment reservoir." By supporting the development of "AI Plus" new business forms, cultivating emerging occupations such as data labeling and scenario maintenance, and building an incremental growth system based on technological innovation, we can promote the process of technological progress to truly transform into a process of value creation and the improvement of employment quality and capacity.

Activating stock assets through intelligent empowerment. The key to revitalizing economic "stock" (existing assets) lies in using digital technology to empower the transformation and upgrading of traditional industries, making huge stock assets regain vitality in the process of intelligent transformation. As a General Purpose Technology, AI can effectively realize the rediscovery of asset value through the digital embedding of traditional production lines. This revitalization of stock resources is essentially a recombination of traditional means of production using data as a new factor of production, continuously promoting the high-end and knowledge-based transformation of traditional industries, and further enhancing the resilience and potential of economic development.

3. Systematically improving the AI policy system

Coordinating development and security and promoting the steady development of the intelligent economy. Coordinating development and security requires us to delineate clear red lines in an institutional environment that encourages innovation, building a resilient security barrier for the release of new momentum. This security covers both technical and ethical dimensions, such as algorithm transparency and data privacy protection, and involves national security and the prevention of systemic risks. We should establish and improve the record-filing system for AI algorithms and a hierarchical and classified regulatory framework, and carry out regular security assessments for problems such as false information, bias, and discrimination that may be generated by large models. In key links such as cross-border data flow and core intellectual property protection, we should strengthen institutional design to prevent security spillover risks caused by technological leadership. Only on the premise of ensuring that technology is trustworthy and risks are controllable can the economic momentum brought by AI be sustainable and robust.

Promoting effective qualitative improvement and maintaining reasonable quantitative growth to achieve the deep integration of AI and the real economy. AI must not only achieve technological breakthroughs but also be implemented in the "AI Plus" action plan and transformed into tangible economic growth performance. We must promote AI from laboratories to production lines and from general large models to vertical industry applications. Policy-making should focus on supporting enterprises in carrying out cross-border integration and innovation, prompting the landing of technology through scenario-driven approaches. In terms of promoting effective qualitative improvement, attention should be paid to AI's contribution to the collaborative efficiency of the entire industrial chain; in terms of maintaining reasonable quantitative growth, the large-scale expansion of the intelligent industry should be supported. By establishing industrial data spaces and opening public data resources, the cost of intelligent applications for enterprises, especially small and medium-sized enterprises, can be reduced. This synergy of quality and quantity will make AI truly an important force supporting the achievement of China's long-term economic growth goals, ensuring a smooth and orderly transition between old and new kinetic energy.

Adhering to "technology for good" and maintaining social harmony and stability. The ultimate goal of technological development is the well-rounded development of the individual. We must attach great importance to the impact of AI on employment, distribution, and social psychology. Although AI will replace some low-end repetitive labor, it will also create various new types of jobs, thereby realizing a structural reshaping of the labor market in its dynamic evolution. To this end, we should increase training in digital literacy for laborers and build a sound career-transition support system to ensure that the dividends of technology benefit the broad masses of the people. At the same time, we must be alert to the excessive concentration of wealth and the widening digital divide caused by algorithms. Through means such as fiscal and tax adjustments and inclusive finance, we must ensure that small and medium-sized enterprises and remote areas can share the opportunities of the intelligent era.