Time sharing would help expand 'last mile' AI usage

Editor's note: China is rapidly expanding the use of artificial intelligence technology in the manufacturing sector. Yang Chao, director of the second research office of the department of innovative development, which is under the Development Research Center of the State Council, spoke to China Economic Times about how the country can harness the potential of AI for the benefit of the sector and the broader economy. Below are excerpts of the interview. The views don't necessarily represent those of China Daily.

To cover the "last mile" of intelligent transformation, it is necessary to help micro, small and medium-sized enterprises use AI through an approach that is lightweight and inclusive.

Governments should take the lead in providing public AI services in industrial parks so that micro, small and medium-sized enterprises operating in the parks can rent the services according to their needs. This will not only enable the enterprises to share the services but also the cost of the services.

Innovative financial solutions, such as equipment leasing, can be adopted to rent out AI equipment on a monthly basis so that companies don't have to spend large sums of money to purchase equipment.

China's AI industry has abundant application scenarios. The country contributes approximately 30 percent of the world's manufacturing growth, and has numerous industrial scenarios, including factory quality inspection, intelligent scheduling, flexible production lines and predictive equipment maintenance. These scenarios form a complete loop for data iteration and feedback.

Moreover, China has a large consumer base, including a large number of AI users. This helps create a robust data flywheel that enables the continuous improvement of domestic models.

China's AI industry offers highly cost-effective services. Domestic large models are attracting developers and users worldwide, as their API calls cost only a small fraction of the fees charged by leading overseas products.

For the AI industry to continue to flourish, innovation, application and security compliance are essential. China has swiftly developed its legal and policy framework for AI governance, including interim measures adopted in 2023 to manage generative AI services, the Cybersecurity Law, which was revised in 2025, and the guidelines issued in May this year to regulate the use of AI agents and facilitate their innovation.

Nevertheless, the following measures are needed to fully unlock the potential of the country's AI industry. There should be a classified and tiered supervision system. The registration process should be streamlined for low-risk AI applications that are only used internally by enterprises.

At the same time, strict measures should be taken to ensure data security for enterprises using these applications and access management should be improved.

For high-stakes scenarios such as critical infrastructure, there should be stringent protocols, such as security assessments, red team testing, permission isolation and final reviews conducted by humans.

Enterprises' compliance costs should be substantially reduced. Efforts should be stepped up to develop a system of market-oriented, third-party compliance services and facilitate mutual recognition of certification results.

AI application scenarios should be expanded to create more opportunities for the application of AI technology. Prudent and inclusive regulatory sandboxes should be promoted.