China's Week, August 20
Two firms implement AI, make billions. Why AI glasses work in China, not elsewhere. The Great Ball Bearing Embargo. WZ-8 hypersonic, near-space stealth drone is operational.
Science & Technology
Goldman Sachs: AI’s insatiable power demand is outpacing the grid’s decade-long development cycles, creating a critical bottleneck. Every year, China adds more electricity demand than the entire annual consumption of Germany.
Tencent is generating actual revenue through AI ecosystem integration—20% growth in AI-enhanced advertising and 38% operating margins despite doubled AI investment. Embedded AI infrastructure may triumph over standalone applications.
The proportion of industrial enterprises deploying large AI models and agents rose from 9.6% in 2024 to 47.5% in 2025. AI is becoming a strategic engine rather than a productivity tool.
World's first phased array computed tomography (CT) scanner starts clinical trials, offering ultra-high-definition (UHD) resolution of 3072x3072, vs 512x512 of conventional CT images.
Economy & Industry
Industrial robot production reached 370,000 units while service robot output hit 8.82 million units YTD, up 36% and 25% YoY.
In the Hundred Glasses War, Xiaomi, Huawei, Rokid, XREAL flood the market with AI-powered smart glasses that use China’s ubiquitous QR codes for “look‑to‑pay,” for
daily utility. Xiaomi’s first model sold 10,000 units in 12 hours.
Share of global semiconductor production. 1990 USA: 37% China: 0% Taiwan: 0%. 2025: China: 24% Taiwan: 18%, USA: 11%.
Embedded AI: Tencent’s advertising grew 20% YoY to $5 billion. AI optimizes the entire funnel across WeChat’s 1.41 billion monthly active users, where improvements compound through network effects. Tencent achieved what Google and Meta promised—profitable AI monetization at scale.
To a gaming company evaluating AI content generation tools Tencent offers not just GPU access but integrated development environments, WeChat ecosystem integration, payment processing and distribution through Mini Programs—a bundled value proposition impossible for standalone cloud providers to match. Tencent’s ability to scale profitably while doubling AI infrastructure spending suggests the technology has matured beyond proof-of-concept into operational advantage.
China-ASEAN trade, $421 billion, was up 9.1%, or 17% of China’s foreign trade, vs. EU’s 13% and the USA’s 9%. Trade with Russia hit $245 billion, double 2020.
China's Power Prices Keep Dropping Despite the Summer Heat. Down to $0.04/KWh., half the US price, and one-fourth the EU’s.
1,592 Taiwan enterprises invested in the mainland in Q1 2025 after 4 million Taiwanese visited in 2024, a year-on-year increase of 54%.
Geoploitics & Diplomacy
Germany and Japan abruptly halted exports of high-speed rail bearings to China in 2023.. Framed as “economic security” policy, the move was in reality a calculated act of technological containment.
Defense
China’s hypersonic, near-space stealth drone is operational. The WZ-8, above, flies at Mach 6-7, at 50km altitude for 8,000–10,000 km after release by a bomber, lower image, lands on regular runways under its own power.
The new light tank, above, weighs 35 tons, 70km/hour, 105mm high velocity cannon, vertical launch system for drones. Three crew sit side by side in the armored hull capsule.
VTOL drones, above, turn PLAN any warship into a ‘mini aircraft carriers’, for high-speed reconnaissance and strike capabilities without aircraft carrier infrastructure. Turbojet for high-speed flight 230 km/h (142 mph), electric rotors for vertical takeoff and landing even in extreme conditions.
China has invested in loitering underwater nuclear drones, XLUUVs, above, at a scale unrivaled by other navies and will reveal them to the world at the anniversary parade.
China, first to deploy hypersonic anti-ship cruise missiles, has the most powerful anti-ship capabilities in the world:
YJ-19, airbreathing scramjet powered hypersonic anti-ship cruise missile.
YJ-20 hypersonic anti-ship ballistic missile.
YJ-15 airbreathing ramjet powered supersonic anti-ship missile.
YJ-17 hypersonic anti-ship glide vehicle.