Employees astatine a ember excavation successful China's Shaanxi state beryllium successful an bureau to usage integer systems for mining work, according to a photograph taken connected April 26, 2023, during a media circuit organized by Chinese telecoms elephantine Huawei.
Wang Zhao | Afp | Getty Images
This study is from this week's CNBC's The China Connection newsletter, which brings you insights and investigation connected what's driving the world's second-largest economy. Each week, we'll research the biggest concern stories successful China, springiness a lowdown connected marketplace moves and assistance you acceptable up for the week ahead. Like what you see? You tin subscribe here.
The large story
Life successful China these days is simply a communicative of stark contrasts.
If successful 1 conversation, my counterparts are wringing their hands implicit a sluggish economy, the adjacent reveals however rapidly artificial quality is revamping industries.
Case successful point: Chinese smartphone institution Honor told CNBC its newest foldable acceptable for merchandise Wednesday volition beryllium the thinnest telephone connected the marketplace to day astatine conscionable 8.8 millimeters erstwhile folded — undercutting adjacent the rumored thickness for Samsung's forthcoming foldable — acknowledgment mostly to its AI manufacturing tools.
Honor said it recovered the optimal operation of slimness and spot by utilizing its "1-billion parameter AI concern model" to simulate much than 125,000 options for instrumentality assembly. The institution said AI-powered 3D scanning allowed it to execute precision power of 0.003 millimeters, oregon astir 1/20th of a quality hair.
In all, that's a 1.1-millimeter portion disconnected its archetypal foldable launched successful July 2023, erstwhile Honor made waves successful the smartphone marketplace with a instrumentality that folded up to beryllium astir arsenic bladed arsenic an iPhone.
But it was besides 2 summers agone erstwhile I callback that overmuch of the post-Covid economical excitement was fading successful China.
Conversations shifted from celebrating the extremity of lockdowns to bemoaning lackluster consumption. The pessimism besides created a home marketplace situation for Honor's foldables, which typically commencement astatine the equivalent of implicit $1,000 each.
A pivotal phase
Looking back, Honor is not the lone large Chinese institution to person made strides implicit the past 2 years. Chinese smartphone institution Xiaomi has launched 2 electrical cars to straight vie with Tesla. DeepSeek was officially registered arsenic a institution successful July 2023, according to records, before launching its breakthrough AI exemplary successful January this year.
AI's pervasiveness has besides started to penetrate the "less flashy" parts of China's economy.
In July 2023, Huawei launched a dedicated AI exemplary for commercialized mining with mining institution Yunding Technology and state-owned Shandong Energy Group. The model, based connected its foundational "Pangu" model, allowed workers to run excavation instrumentality remotely from an bureau and make different tech solutions much quickly.
Fast-forward to 2025, and the AI tech has been integrated successful much than 100 mines, according to Huawei's yearly study released successful March. In May, the company's lawsuit successful Inner Mongolia launched 100 self-driving electrical trucks for a section ember mine.
Huawei past period revealed a new, 5.5 mentation of its Pangu instauration model, and connected Monday, released an open root mentation for developers.
Foreign companies are besides spurring technological innovation connected the mainland, specified arsenic German concern elephantine Siemens.
Out of 18 AI-integration related products Siemens conscionable launched, 16 were developed successful China successful conscionable 9 months, Peter Koerte, the company's main exertion serviceman and main strategy officer, said past week during the World Economic Forum league successful Tianjin. He described applications specified arsenic AI-powered vigor savings systems for buildings.
These technological breakthroughs are the effect of years oregon months of painstaking development, but it's lone much precocious that businesses are reaping the rewards.
"AI is transforming from isolated technological innovation into thing that is halfway oregon embedded successful the full concern process," Janet Tang, Hong Kong-based spouse and managing manager astatine AlixPartners, told maine past week connected the sidelines of the league successful Tianjin.
She stated that the important integration of AI with concern operations began astir 12 months ago, pursuing extended proceedings and mistake implicit the past fewer years.
Economic impact
While China's biggest cities are yet to spot a instrumentality to the pre-Covid roar days, determination are signs that the accelerated municipality maturation has alternatively dispersed to smaller cities and adjacent agrarian areas.
Malipo, a Yunnan region erstwhile truthful mediocre it has received targeted assistance from the overseas ministry, started revamping its "Tianbao" onshore trading larboard connected the borderline with Vietnam successful 2023. The region adjacent courted Hong Kong's Sunwah Group to put 50 cardinal yuan to unfastened a beverage processing works successful the aforesaid year.
The larboard has since seen a surge successful durian trade, portion plans are underway to unfastened a tourer attraction with Sunwah successful the county, allowing visitors to spot beverage trees that region caput Xiao Changju claims are respective 100 years old. She was speaking to reporters during a state-organized travel to the portion successful May.
Augmented world glasses startup Xreal invested successful its ain mill successful the southeastern "tier 2" metropolis of Wuxi and earlier this twelvemonth announced a new glasses merchandise moving Google's XR operating system.
The institution is besides moving its office from Beijing to Shanghai this summertime to beryllium person to its specialized factories successful Wuxi that marque optical parts and different components, CEO and laminitis Chi Xu told maine connected the sidelines of the World Economic Forum's lawsuit successful Tianjin past week.
Xu hopes that his products tin scope consumers by the extremity of this year, portion noting the U.S. remains the apical marketplace for Xreal.
"I'm ever impressed by the level of energy, hardworking and openness of the enterprises present successful China," AlixPartners' Tang said. Despite protectionism oregon different challenges, "everyone is inactive truthful motivated, truthful anxious to larn caller things and to link with the remainder of the world."
Top TV picks connected CNBC
Grant Pan, Group CFO of Noah Holdings, said that investors are looking to diversify their assets distant from conscionable the U.S. and China markets.
Tolga Oncu, COO of Ingka Group, which manages IKEA, discussed the contention and opportunities helium sees successful China, particularly successful the 'silver' economy.
Aditi Rasquinha, CEO of DHL Global Forwarding Greater China, stated that the region's export maturation has remained resilient contempt a slowdown successful U.S.-China trade.
Need to know
In the markets
The show of the Shanghai Composite implicit the past year.
Mainland China and Hong Kong stocks inched higher amid mixed trading successful the region, arsenic investors digested the latest comments from U.S. Federal Reserve Chair Jerome Powell.
The CSI 300 index, which tracks the apical 300 stocks traded connected the Shanghai Stock Exchange and the Shenzhen Stock Exchange, closed level astatine 3,943.68, portion Hong Kong's Hang Seng Index — which includes large Chinese companies — gained 0.62%. The mainland benchmark is up 0.22% twelvemonth to date, information from LSEG showed.
— Lee Ying Shan
Coming up
July 2: Honor to merchandise its adjacent foldable phone
July 3: Caixin Services PMI
July 5: Legoland opens its archetypal China edifice successful Shanghai
July 9: CPI and PPI for June
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