China’s AI Economy 2035 🤖 Flying Taxi in Africa 🚁 Russia-China Gas Deal 🔥

2025-09-08 | subscribe | homepage

Welcome back to China Insights Weekly. Here are some of the key highlights for this week’s edition:

• Medical AI enters critical care, with models diagnosing heart conditions in minutes

• World’s first tokenized bond on Ethereum listed in Shenzhen and Macau

• China installs half the world’s new industrial robots, keeping export edge alive

• Huawei overtakes Apple in smartwatches as China becomes the biggest market

🚀 Headlines

Chinese flying taxi takes to the skies for the first time in Africa as firms eye global roll-out (link)

A Chinese-made pilotless electric air taxi completed its first test flight in Rwanda, marking a significant step for China's aviation firms in the global market. The electric vertical take-off and landing vehicle (eVTOL), developed by Nasdaq-listed EHang Holdings, was showcased during the Aviation Africa Summit and Exhibition in Kigali. This event involved 34 countries and highlighted Rwanda's ambition to lead in cutting-edge aviation technology. Rwanda, with a population of 14.2 million, aims to improve air transport links to reduce urban congestion and air pollution. The test flight was arranged in partnership with China Road and Bridge Corporation, a Chinese state-owned firm. This collaboration underscores China's growing influence in the aviation sector and its push for innovative solutions to global transportation challenges.

China unveils plans to establish a fully AI-powered economy by 2035, Alibaba, Tencent’s medical AI models breaking into critical care (link, link)

China's State Council has unveiled a ten-year plan to establish a fully AI-powered economy by 2035, aiming to make AI a "key growth engine" for the country's development. The plan outlines six main pillars for AI integration by 2027, including science and technology, citizen wellbeing, industrial development, consumer goods, governance, and international relations. By 2030, China expects AI usage to reach 90%, becoming a new type of infrastructure and a major economic driver. The plan emphasizes open-source AI development and supporting global AI regulation through the UN. The plan aims to strengthen key areas like basic AI model performance, security, data supply, and power management to further advance China's AI capabilities.

Alibaba and Tencent's medical AI models are breaking into critical care. Alibaba's DAMO Academy and the First Affiliated Hospital of Zhejiang University School of Medicine launched iAorta, a large language model that can identify acute aortic syndrome in seconds using a routine CT scan, reducing diagnosis time to under two hours. Tencent's Qiyuan Critical Care Model, developed with Shenzhen Mindray Bio-Medical Electronics, can compile a patient's full medical picture in five seconds, predict trends, and provide treatment recommendations. These models are being applied in critical care settings, where timely and accurate diagnosis is crucial. As of May, China had released nearly 300 large medical language models, with over half being used in healthcare services. The integration of AI in critical care aims to improve diagnosis accuracy and treatment efficiency.

China-owned enterprise in Shenzhen to issue world’s first publicly listed Real-World Asset (RWA) digital bond on Ethereum (link)

Shenzhen-based state-owned enterprise Futian Investment Holding has issued the world's first publicly listed Real-World Asset (RWA) digital bond on the Ethereum blockchain, valued at 500 million yuan (USD 70 million). This two-year offshore RMB bond has an interest rate of 2.62%. The bond is listed on both the Shenzhen and Macau markets, marking the first time tokenized securities based on a public blockchain have been allowed on traditional exchanges. This initiative aims to broaden global financing channels and optimize capital structure while leveraging Hong Kong's policy advantages. The technology for the issuance was provided by Hong Kong start-up NVT. This move signifies a significant step in integrating blockchain technology with regulated capital markets, although it does not represent a broader embrace of digital assets by China.

Russia and China agree to major new gas pipeline deal (link)

Russia and China have signed a memorandum of construction for the Power of Siberia 2 gas pipeline, a significant project that will reshape global energy flows. The pipeline, expected to be operational in the early 2030s, will transport 50 billion cubic meters of gas annually from Russia's West Siberia to northern China via Mongolia. This deal provides Russia with a crucial alternative export route as it faces declining European markets due to the conflict in Ukraine. For China, it offers a reliable alternative to importing liquefied natural gas (LNG) from the US, Qatar, and Australia. The agreement also includes plans to increase existing gas supplies by 8 billion cubic meters annually, aiming for a total of 56 billion cubic meters before the new pipeline is completed. While the memorandum covers general terms, pricing details are yet to be finalized, which will be crucial for Russia as it seeks to bolster its energy revenues amid economic challenges.

China’s cleaning robot makers make clean sweep of global top four firms in the 1st half of 2025, expand overseas reach (link)

Chinese cleaning robot makers have secured the top four spots in global market share. Global shipments of smart home-cleaning robots surged 33% in the first half of 2025 to 15.4 million units. Roborock Technology led with a 15.2% market share, followed by Ecovacs Robotics at 13.7%, Dreame Technology at 10.2%, and Xiaomi at 7.4%. Shipments of robot vacuum cleaners increased 17% to 11.3 million units, while lawn-mowing robots saw a sharp increase, more than quadrupling to 2.3 million units. Sales of swimming pool-cleaning robots also jumped 19% to 933,000 units. Chinese manufacturers are expanding their product functions and application scenarios, targeting overseas markets through e-commerce and offline sales channels. Global shipments of cleaning robots are projected to reach 32.1 million units in 2025, with growth expected to remain around 30% annually, reaching 69.8 million units by 2028.

Huawei’s smartwatch shipments top Apple for the first time as China surpasses the US to become the largest market (link)

Huawei overtook Apple as the world's leading smartwatch supplier in Q2 2025, with its shipments surging 52% YoY to capture a 21% market share, according to Counterpoint Research. Apple's shipments fell for the seventh straight month, down 3% YoY, reducing its market share to 17%. Huawei's success is attributed to its strong presence in China, where it focuses on the USD100-400 price range, appealing to a broad consumer base. Xiaomi ranked third with a 9% market share, thanks to a 38% YoY shipment increase. Imoo, the leading kids' smartwatch brand, ranked fourth with a 7% share, up 21% YoY. Samsung Electronics dropped to fifth with a 6% share, down 3% YoY. Globally, smartwatch shipments grew 8% YoY in Q2, driven by China's 33% increase. China also surpassed North America to become the largest market for high-end smartwatches.

China adds 280,000 robots a year, half of global installations, to power surge in labor-intensive exports (link)

China is rapidly integrating robots into its manufacturing sector, installing approximately 280,000 industrial robots annually, which accounts for half of the global total. This surge is driven by government initiatives like the Made in China 2025 plan, which aims to boost domestic robot makers and invest heavily in automation. China's robot-to-worker density is now ahead of Germany and approaching South Korea's lead. About half of these robots are produced by domestic firms, which offer cost-effective solutions compared to global competitors. This automation wave is helping China maintain its competitive edge in exports, even in labor-intensive industries, by reducing labor costs and increasing efficiency. For instance, Shuangsheng New Energy Vehicle in Sichuan has automated half of its production line, opting for local robots that cut labor costs by half and double efficiency. This trend is expected to continue as China aims to transition from human labor to robotic labor, maintaining its manufacturing prowess.

China unveiled the world's most powerful floating wind turbine, to install nearly 75% offshore turbines globally (link)

China has unveiled a double-headed wind turbine designed to capture wind from both directions, significantly enhancing energy efficiency. The innovative turbine, developed by Chinese engineers, features two rotors on a single tower, allowing it to harness wind from multiple angles. This design is expected to increase power generation by up to 20% compared to traditional single-rotor turbines. The double-headed turbine is part of China's broader efforts to boost renewable energy production and reduce carbon emissions. With the global push towards sustainable energy, this technological advancement positions China as a leader in wind power innovation. This year, it will install nearly three out of every four of the world’s new offshore turbines.

🎁 Bonus Stories

Russian passport holders can stay in China for up to 30 days without a visa starting from Sept. 15 (link)

Starting September 15, 2025, China will grant a visa exemption to Russian citizens holding ordinary passports, allowing them to stay in China for up to 30 days. This measure, effective until September 14, 2026, aims to facilitate travel for tourism, business, family visits, cultural exchanges, and transit. Chinese citizens can also enter Russia with an electronic visa (e-Visa) for a period of 30 days or benefit from a visa exemption for organized group travel of up to 15 days.

Top Harvard mathematician Liu Jun leaves US for China, the number of Chinese students in the US fell by 20% (link)

Leading statistician and longtime Harvard professor Liu Jun has returned to China, accepting a prestigious chair at Tsinghua University. Liu, a pioneer in data science, biostatistics, and AI, was born and raised on the Tsinghua campus, where his father was a teacher. Despite growing up during the Cultural Revolution, when university study was discouraged, Liu developed a passion for mathematics, reading any math books he could find. He later studied at Peking University before moving to the US. After obtaining his PhD in just three years, he held positions at Stanford and Harvard. His return to Tsinghua marks a significant homecoming, driven by patriotism and a love for education and science, amid a backdrop of research cuts in the US. Liu's appointment as the "Tsinghua University Xinghua Distinguished Chair Professor" is the institution's highest honor, previously awarded to only two other top scientists.

The number of Chinese students in the US fell by 18.8% in the 2024-2025 academic year, with a significant drop in STEM fields. Chinese students now make up 28.5% of all international students in the US, down from 34.7% in 2019-2020. The decline is attributed to stricter visa policies and geopolitical tensions. Many students are now considering other destinations like Canada, the UK, and Australia. The trend reflects a broader shift in global education preferences and highlights the impact of US-China relations on student mobility.

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