Liqi Xu

On October 9, the CCP Central Committee and the State Council jointly released the Guidelines on Developing New Quality Productive Forces, outlining 19 measures that seek to translate technological innovation into higher productivity and industrial upgrading.

Beijing is systematically executing its AI+ Action Plan across specific industries, with the energy sector its most recent focus. On May 8, four Chinese government agencies jointly issued the Action Plan for Promoting the Mutual Empowerment of AI and Energy, offering an early glimpse into how Beijing will operationalize its AI ambitions. In explicitly linking AI development and energy security, the document solidifies China’s strategy of embedding AI in existing industrial systems rather than treating AI as its own separate industry.

Shanghai, Jiangsu, and Guangdong remain the most mentioned locations for government engagement, unchanged from the past two years and underscoring the sustained economic vitality of the Yangtze River Delta and the Greater Bay Area. Shanghai leads in overall mentions, but Jiangsu surpassed the megacity when accounting for preference strength.

In December, China officially opened the Hainan Free Trade Port (FTP). The Belgium-sized Hainan Island is now a separate customs territory, allowing goods to enter the island tariff-free and exempt from value-added and consumption taxes across 74% of tariff categories. Items subsequently shipped to mainland China may also qualify for tariff-free treatment if their local processing in Hainan accounts for at least 30% value-added.

Multinational companies have struggled to acquire rare earth magnets from China since the announcement, with several USCBC members expressing concern about manufacturing disruptions caused by delays in export approval for rare earth material from China.