Chinese tech firms are showcasing AI innovations despite U.S. sanctions limiting access to advanced technology. The government's industrial policy supports research, talent development, and computing resources to position China as an AI leader by 2030. While export controls on AI chips create challenges, companies are making strategic adaptations. AI adoption is expanding in electric vehicles, robotics, and healthcare. The private tech sector drives much innovation, developing alternatives to U.S. models. Despite obstacles, China's AI industry is expected to maintain its position as a close second to the U.S., fueled by market competition and government investment.