Chinese Premier Li Qiang unveiled a proposal for a global governance framework for artificial intelligence (AI) during the World AI Conference (WAIC) held in Shanghai. This announcement follows the United States’ recent introduction of its own AI action plan aimed at establishing American leadership in the rapidly evolving sector. The timing of these developments highlights the increasing competition between the two economic powers, especially as AI becomes a pivotal issue in trade negotiations.
In his address at WAIC, attended by tech leaders from over 40 countries, Li emphasized the current fragmentation in global AI governance. “Overall, global AI governance is still fragmented. Countries have great differences, particularly in terms of regulatory concepts and institutional rules,” he stated. He urged nations to strengthen coordination to develop a consensus-driven global framework for AI governance.
Li’s remarks came just days after the U.S. administration released a comprehensive 28-page AI action plan. This plan aims to eliminate bureaucratic hurdles and promote U.S. dominance in the AI sector. While Li refrained from directly referencing the U.S., he acknowledged the ongoing trade tensions between the two nations, particularly addressing the American restrictions on advanced semiconductor exports essential for AI development. “If we engage in technological monopoly, controls and restrictions, AI will become an exclusive game for a small number of countries and enterprises,” Li cautioned.
AI chips have emerged as critical bargaining tools in U.S.-China trade discussions, which continued this week in Stockholm. Both countries appear to have made recent concessions; the U.S. lifted its ban on sales of a key Nvidia AI chip to China, while China suspended its antitrust investigation into the American chemical firm DuPont. U.S. former President Donald Trump commented from Scotland that the U.S. is “very close to a deal with China,” although specifics remain undisclosed. The deadline for a potential agreement is set for August 12.
China is making significant strides in the AI sector, with over 5,000 AI companies and a core industry valued at 600 billion yuan (approximately $84 billion) as of April 2025. This growth is fueled by substantial government and private sector investment. Between 2013 and 2023, state venture capital firms reportedly invested around $209 billion in AI enterprises, according to research from the National Bureau of Economic Research. Public sector spending on AI is projected to exceed 400 billion yuan (about $56 billion) this year.
While China’s AI investment still lags behind the U.S., where private AI investments reached $109.1 billion in 2024, the gap is closing. Notably, since 2017, China has published more patents for generative AI inventions than all other countries combined, as reported by the World Intellectual Property Organization. The recent launch of the AI model R1 by the Chinese startup DeepSeek has demonstrated the country’s rapid advancement, outperforming established models from Meta and Anthropic. Developed for just $5.6 million, R1 showcases China’s growing technical capabilities and cost efficiency in AI development.
The pace of innovation in China’s AI landscape is anticipated to yield significant returns. Research from Morgan Stanley suggests that China’s AI market could break even within the next few years, delivering a projected 52% return on investment by 2030.
Calls for robust governance to address potential risks associated with AI, such as misinformation and cybersecurity threats, were echoed at WAIC. Dr. Kao Kim Hourn, Secretary-General of ASEAN, stressed the importance of coordinated international action to ensure that AI serves human welfare and social good. He noted that AI implementation in the ASEAN region could significantly enhance its digital economy and potentially increase regional GDP by 10-18%.
Former Google CEO Eric Schmidt also advocated for collaboration between the U.S. and China on AI governance. “As the largest and most significant economic entities in the world, the United States and China should collaborate on these issues,” he stated.
The WAIC, organized by the Singaporean think tank Artificial Intelligence International Institute, has been a crucial platform for showcasing technological advancements since its inception in 2018. This year’s conference featured over 800 companies, prominently displaying products from Chinese firms such as Tencent, Alibaba, and SoftBank-backed Keenon Robotics. Attendees explored 3,000 exhibits, unveiling over 100 new products, including innovative AI models and robotics.
The ongoing developments in AI governance and technology from both China and the U.S. indicate a pivotal moment in the global landscape of artificial intelligence, with significant implications for international cooperation and competition in the sector.