China's AI Ambition Deepens Wealth Divide, Challenging Common Prosperity
The Rise of AI in China and the Growing Regional Divide
China is pushing forward with its "AI-plus" plan, aiming to integrate artificial intelligence into every aspect of its economy. This initiative is expected to fuel growth in sectors ranging from manufacturing to scientific research. However, experts warn that the benefits of this technological revolution may not be evenly distributed, potentially deepening existing regional inequalities.
The digital economy is becoming a crucial driver of China's growth, with the government setting ambitious targets. By 2030, the digital economy is expected to account for 12.5% of the country’s GDP, up from 10.5% in 2025. This shift highlights the importance of AI as a new engine of economic development.
Despite these goals, the adoption of AI may not benefit all regions equally. Major cities like Beijing, Shanghai, and Shenzhen are likely to see significant gains due to their strong technology clusters, well-established universities, and supportive local governments. These areas already have the infrastructure and talent needed to leverage AI effectively.
In contrast, smaller cities and rural regions may struggle to keep pace. Analysts suggest that these areas often lack the necessary skills and innovation-driven firms to fully capitalize on AI advancements. As a result, they may face challenges in adapting to the changes brought by automation and digital transformation.
Lynn Song, chief economist for Greater China at ING, noted that the economic benefits of AI will not be evenly distributed. "Those who are most directly connected to the core parts of China's AI supply chain will benefit more," he said. This could lead to a widening gap between urban and rural areas, exacerbating existing regional disparities.
Industrial adoption of AI may bring productivity gains, but these benefits may not be enough to offset potential job losses. In some cases, AI could automate routine tasks in manufacturing or agriculture without creating sufficient new employment opportunities. This could leave workers in less developed regions struggling to find stable jobs.
On the other hand, major metropolises are better positioned to take advantage of AI. Their skilled workforce is more likely to use AI tools rather than be replaced by them. Additionally, AI could create "agglomeration effects," attracting more talent and innovative firms to already successful cities.
Anthony W. D. Anastasi, an assistant professor of economics at the Sino-British College in Shanghai, pointed out that cities receiving government support are already economically strong. For example, Beijing and Shanghai had the highest per capita disposable income in 2025, while Gansu province recorded the lowest. This disparity underscores the potential for AI to worsen existing regional and income imbalances.
Policymakers face the challenge of ensuring that workers and firms outside leading technology hubs can also benefit from AI. Analysts suggest that this will require stronger skills training, better incentives for workers to adapt, and broader improvements in digital infrastructure.
Song believes that, over time, the overall economic growth driven by AI could eventually benefit the entire country. "Similar to every major productivity boom in history, there will be winners and losers, and inequality typically worsens in the early stages before narrowing as the technology matures," he added.
As China continues to invest in AI, the focus will be on balancing the benefits of technological advancement with the need to address regional disparities. Ensuring that all parts of the country can participate in the digital economy will be critical to achieving long-term economic stability and social equity.
