China's artificial intelligence industry has entered what could prove to be a defining phase in its competition with the United States, with leading domestic large language models now matching top-tier US systems in performance, said Yu Xianrong, head of Greater China Economics at Citi.

The rapid progress in AI and broader technological innovation are among the hot topics at the on-going annual meetings of China's top legislature and top political advisory body.

Yu's assessment reflects a broader structural shift rather than a narrow technological milestone. Citi's calculations show that China's chip self-sufficiency rate has doubled over the past decade, signaling steady progress in reducing reliance on external supply chains. Meanwhile, roughly 70 percent of global AI patents now originate from China, underscoring the country's growing dominance in intellectual property generation. In terms of human capital, China has surpassed the US in the number of top-tier AI researchers, Yu said.

Beyond algorithms and talent, China's advantage lies in its industrial depth. With a full-spectrum industrial system, the country offers an unparalleled range of real-world application scenarios for AI deployment. Nowhere is this more evident than in the humanoid robotics supply chain, where China holds a particularly strong position in scale production capacity.

Yu argued that these technological and industrial strengths have begun to reshape market perceptions. He described 2025 as an inflection point for China's economy, marked by a pronounced improvement in sentiment. Long-discounted Chinese assets have undergone a long-awaited revaluation, driven in part by renewed investor recognition of the country's innovation capabilities and industrial competitiveness.