President Xi Jinping has underscored a balanced approach to innovation and industrial development as the foundation of China’s strategy to cultivate “new quality productive forces,” following a year of high-profile inspections and policy guidance.
According to official accounts, Xi’s engagements over the past year reflect a dual emphasis: accelerating breakthroughs in frontier technologies such as artificial intelligence while reinforcing the role of traditional industries in sustaining the real economy.
In April 2025, the Political Bureau of the Communist Party of China Central Committee convened a group study session focused on AI development and governance. Xi used the occasion to call for stronger coordination between innovation, industrial application and regulatory oversight.
He stressed that China must advance AI development in a holistic manner, ensuring that technological progress translates into real economic value while remaining aligned with national security and governance priorities.
Shortly after the meeting, Xi travelled to Shanghai to observe progress at the Shanghai Foundation Model Innovation Center. There, he highlighted the strategic importance of AI in supporting China’s modernisation drive and national rejuvenation goals.
While promoting emerging technologies, Xi also made clear that foundational industries remain indispensable. During his inspection of Bensteel Group in Liaoning, he reaffirmed steel’s role as a backbone of the national economy.
Xi said that advanced manufacturing cannot exist in isolation from core industries, emphasising that industrial upgrading must be grounded in a strong real economy.
This message was reinforced during his visit to Luoyang Bearing Group in Henan, where he described scientific and technological empowerment as the engine of modern manufacturing.
He noted that China’s manufacturing success stems from its adherence to an independent development path — one that prioritises domestic capabilities and complete industrial chains.
Later, in Shanxi province, Xi told workers at Yangquan Valve Co. Ltd that traditional industries should not be discarded in the pursuit of innovation.
Instead, he urged enterprises to integrate new technologies into existing sectors, improving efficiency and competitiveness through digitalisation and innovation-led transformation.
Analysts see Xi’s remarks as signalling a clear policy direction: innovation must serve the real economy, and productivity gains must be rooted in both technological advancement and industrial depth.