International Institute for Middle East and Balkan Studies (IFIMES)[1] from Ljubljana, Slovenia, regularly analyses developments in the Middle East, the Balkans and around the world. In the article “From ‘Machine Intelligence’ to ‘Swarm Intelligence’: China Builds a Global Intelligent Economy of the Future,” Paweł Gałecki, Creative Tower Brand Owner and expert in international relations, examines how China’s economy is entering a new phase in which artificial intelligence is becoming a central structural driver, fundamentally reshaping production, markets, and global economic dynamics. This transformation, underpinned by rapid technological advancement and expanding international ambitions, places Europe and the broader international system before a strategic choice between cooperation, competition, and adaptation to the emerging “intelligent economy.”
The Chinese economy is undergoing a fundamental transformation driven by artificial intelligence and advanced technologies that will reshape global economic dynamics for decades to come. In 2026, for the first time, the government work report emphasized the imperative need to create "new forms of intelligent economy" and deepen the comprehensive "AI plus" initiative across all sectors of the national economy. The value of China's core artificial intelligence sector exceeded 1.2 trillion yuan (approximately 174 billion dollars) in 2025, with over 6,200 specialized enterprises operating actively in the industry. This transformation signifies a profound shift from the traditional digital economy model toward deep integration of artificial intelligence with conventional sectors, fundamentally altering production methods, service delivery, and economic organization.
Artificial intelligence is rapidly ceasing to be merely a technological tool and is becoming a fundamental structural element of the economy, directly influencing resource allocation mechanisms, industry organization patterns, and service delivery models. During the prestigious Zhongguancun Forum 2026 held in Beijing, advanced robotic systems were presented that have progressed dramatically from "single machine intelligence" to sophisticated "swarm intelligence," enabling autonomous collaboration in complex teams without direct human participation or supervision. This technological leap represents a qualitative change in how production systems can be organized and managed. The next critical steps in China's AI strategy include systematically scaling artificial intelligence applications across diverse sectors such as manufacturing, agriculture, education, and healthcare. Comprehensive plans also encompass building robust open source communities, developing the intelligent agents industry, and creating large-scale computing clusters capable of handling massive data processing requirements. China's fundamental strengths in this transformation include exceptionally rich data resources generated by its vast population, a complete industrial system spanning all manufacturing categories, and a remarkably wide spectrum of practical applications that enable rapid transformation of theoretical technology into tangible economic value.
During the annual Boao Forum for Asia 2026 conference, prominent business leaders and policymakers emphasized that artificial intelligence is no longer a standalone technological tool but rather a fundamental transformative force fundamentally changing how various industries function, compete, and create value. Companies across sectors must urgently transform themselves from traditional hardware suppliers to comprehensive solution providers that enable sophisticated data-driven decision-making processes. In the education sector, artificial intelligence is enabling genuinely personalized teaching tailored to individual student needs and learning patterns—an educational ideal that remained practically unattainable for over 2,000 years of pedagogical history. During the nine-day Spring Festival holiday period, approximately 4 million people over 60 years old used AI-based mobile applications for the first time to order food delivery services, demonstrating technology's penetration into everyday life across all demographic segments. The number of orders placed using artificial intelligence recommendation systems in lower-tier cities and counties also increased significantly, conclusively demonstrating that advanced technology is contributing to highly practical everyday applications rather than remaining confined to elite urban centers.
Profits of China's largest industrial companies increased by an impressive 15.2% year-on-year in the first two months of 2026, reaching a substantial total value of 1.02 trillion yuan. The growth rate accelerated dramatically by 14.6 percentage points compared to the full year 2025 performance, indicating strengthening economic momentum. The principal growth drivers are emerging sectors such as advanced equipment manufacturing and high-technology industries. The industrial sector overall grew robustly by 18.9%, while the mining sector increased by 9.9%, representing a remarkable turnaround compared to a decline of 26.2% in the previous year. Production and supply of energy, heat, gas, and water infrastructure rose by 3.7%, supporting broader industrial expansion. Profits in 24 of 41 major industrial sectors increased year-on-year, representing 58.5% of all tracked sectors and indicating broad-based economic improvement rather than narrow sectoral gains. The equipment manufacturing sector played a particularly significant stabilizing role in overall industrial performance. Operating revenues of major equipment manufacturing companies increased by 8.9% year-on-year, while profits of major equipment manufacturing companies accounted for 30.4% of total profits of the largest industrial enterprises, representing a substantial 2 percentage point year-on-year increase in their share. Of the eight equipment manufacturing subsectors, five achieved notable profit growth. The electronics, railway equipment, shipbuilding-aviation, and electrical machinery industries recorded particularly rapid profit growth rates.
Profits of the largest high-tech manufacturing companies surged by an extraordinary 58.7% year-on-year, demonstrating the economic impact of technological upgrading. Profits from production of intelligent unmanned aerial vehicles increased by 59.3%, intelligent in-vehicle devices by 50%, and other intelligent consumer devices by 31.3% respectively. The rapid development of the semiconductor industry also drove significant profit growth in related upstream and downstream sectors. Importantly, the cost of operating revenues per 100 yuan for large industrial enterprises decreased to 84.83 yuan, representing a year-on-year decrease of 0.24 yuan. This marks the first year of cumulative cost decline for industrial companies since 2022, indicating improving operational efficiency. China's anti-involution policy, strategically aimed at countering excessive market competition and restoring sustainable enterprise profitability, is producing demonstrably positive results across the industrial landscape.
China's Minister of Commerce Wang Wentao expressed strong support for adopting the World Trade Organization agreement on electronic commerce, signaling China's commitment to rules-based digital trade. In March 2026, significant interim arrangements were announced that establish foundational global rules for digital trade and will effectively promote more inclusive and sustainable digital development worldwide. During the 14th WTO Ministerial Conference, 66 WTO members, including China, announced that the interim arrangements will create a viable path toward implementing the comprehensive E-commerce Agreement while continuing technical work on its formal incorporation into the WTO legal framework. The E-commerce Agreement represents an important milestone for the WTO in recent years and will enter into force after 45 member states submit formal acceptance documents.
Chinese companies are planning to significantly increase their operational presence in the European Union market despite ongoing concerns about complex regulations and considerable political uncertainty. A comprehensive report published during the Forum on New Quality Productive Forces and Cross-border Financing 2026 in Luxembourg, based on detailed surveys of 100 Chinese enterprises operating across Europe, revealed several key strategic trends. Nearly 80% of surveyed Chinese companies stated they plan to increase investments in the European Union over the next three years, with 15% declaring significant and substantial investment increases. Chinese investments in Europe have become increasingly diversified in recent years, now covering 18 distinct industrial sectors rather than concentrating in traditional areas. Manufacturers of vehicles and automotive parts powered by new energy sources accounted for over a quarter of surveyed companies, followed by IT and software companies and renewable energy enterprises. Emerging sectors such as electric vehicles, renewable energy, artificial intelligence, and biotechnology are rapidly becoming new focal areas of bilateral economic cooperation.
Chinese companies are increasingly localizing their operations throughout Europe, consciously transitioning from the traditional model of exporting finished products to Europe toward implementing a comprehensive "in Europe, for Europe" strategic approach. This fundamental shift reflects a maturing and sophisticated approach to the European market, treating it as a production base and innovation center rather than merely an export destination. However, the study also highlighted significant pressures and challenges facing Chinese companies operating in Europe. Over half of respondents identified political uncertainty as their primary operational problem, ranking ahead of geopolitical risk, market access barriers, and cultural differences. Over 72% of companies indicated that greater policy stability and predictability represent the most urgently needed improvement in the European business environment. EU regulations and policy measures identified as having the greatest operational impact on Chinese companies included the General Data Protection Regulation, the Foreign Subsidies Regulation, anti-subsidy measures specifically targeting Chinese electric vehicles, and the comprehensive EU Battery Regulation. The Minister of Trade and Economy of the Chinese Mission to the EU, Suo Peng, called on European financial institutions to provide substantially greater long-term capital support for technological innovation projects, arguing that such financing is essential for realizing the full potential of Chinese-European technological cooperation.
The Global South Financiers Forum 2026 was held in Beijing in March under the theme "Illuminating the Global South," bringing together financial leaders from developing economies. Beijing Deputy Mayor Sun Shuo emphasized that Beijing will remain firmly committed to high standards of economic opening and expanding financial cooperation with Global South countries, focusing specifically on improving the business environment, strengthening scientific-technical and financial integration, and actively supporting cooperation in green finance initiatives. People's Bank of China Vice President Lu Lei stated that the central bank actively encourages financial institutions to pursue green and low-carbon investments in countries and regions participating in the Belt and Road Initiative. The central bank stands ready to cooperate with all interested parties to support high-quality development of green finance mechanisms and direct substantial capital flows toward green and low-carbon sectors globally. Deputy Head of the State Administration of Foreign Exchange Li Hongyan observed that the ongoing restructuring of the global green industry creates highly favorable opportunities for China and other Global South countries to collaborate. Through maintaining high standards of financial opening, China will systematically deepen cooperation with other Global South countries in green industries and related financial services. Luxembourg has played an important facilitating role as the largest renminbi clearing center outside Asia and an important platform for listing Chinese euro-denominated bonds. Seven of China's largest commercial banks currently operate in Luxembourg, providing comprehensive financial services to support bilateral economic ties. Last year, several banks successfully helped China's Ministry of Finance issue treasury bonds worth 4 billion euros in Luxembourg, demonstrating the depth of financial integration.
The annual Boao Forum for Asia conference in 2026 was held from March 24-27 under the theme "Shaping a Common Future: New Dynamics, New Opportunities, New Cooperation." This year marks the significant 25th anniversary of BFA, which has evolved into a prestigious platform promoting substantive exchange, practical cooperation, and common development between Asian nations and the broader world. Chairman of the Standing Committee of the National People's Congress Zhao Leji emphasized that only through humanity's united efforts can civilization effectively face global risks and challenges and create a better future for all. In the face of rising geopolitical tensions and growing protectionism globally, policymakers, business leaders, and scholars gathered in Boao, sharing hope that "Boao voices" can offer much-needed clarity and build consensus on critical issues. The BFA economic report stated that Asia remains the world's main growth engine, with its share of global GDP expected to rise to 49.7% in 2026 from 49.2% in 2025 based on purchasing power parity calculations. Asia remains the world's leading destination for foreign direct investment, valued particularly for its economic resilience, substantial growth potential, and enduring attractiveness to global investors seeking opportunities.
BFA Chairman and former UN Secretary-General Ban Ki-moon stated that Asia's dynamic growth trajectory has been largely driven by globalization, free trade, and progressive regional integration. When the forum was first established, China's GDP was approximately 9.59 trillion yuan. Currently, this figure has exceeded 140 trillion yuan, and China is emerging as a leading global advocate of globalization and trade liberalization. Over the past five years, China's economy has grown at an average annual rate of 5.4%, and its contribution to global economic growth remains at approximately 30%, firmly underscoring its role as a key engine of the world economy. The dynamic transformation of the Chinese economy toward an intelligent economy based on artificial intelligence carries profound implications for the European Union, Central and Eastern Europe, and the Western Balkans across technological, economic, and strategic dimensions. For the European Union, China's acceleration in artificial intelligence, quantum technology, and biotechnology represents simultaneously both a competitive challenge and a significant opportunity for mutually beneficial cooperation. Europe must make a strategic decision whether to adopt a model of regulated cooperation that actively supports the innovation and competitiveness of European value chains, or to deepen protectionism, which may ultimately isolate the continent from global innovation networks.
Political uncertainty identified by over 50% of Chinese companies as the main operational problem in the EU signals the urgent need for regulatory reform and policy stabilization. For Central and Eastern Europe, China's "in Europe, for Europe" strategy and investment diversification covering 18 industrial sectors creates unprecedented development opportunities. The region can strategically position itself to become a key hub for Chinese investments in electric vehicle production, renewable energy infrastructure, pharmaceutical manufacturing, and innovative technologies. However, Central and Eastern Europe must also navigate tensions between national economic interests and the requirements of common EU policy, and above all, develop the capacity for speaking with one common voice at the European Union forum. For the Western Balkans, a region actively aspiring to EU membership, China's cooperation initiatives and commitment to green and low-carbon investments under the Belt and Road Initiative offer alternative sources of infrastructure and development financing. However, the region must carefully balance between leveraging Chinese investments for development and adapting to EU standards, which can prove particularly difficult in the context of growing geopolitical tensions. The Western Balkans and Central and Eastern European countries already part of the EU must strengthen cooperation and intensify joint actions aimed at diversification and development of both national economies and common economic potential.
The common voice of Central and Eastern Europe and the Western Balkans should not be merely a voice of opposition or obstruction. This voice should be substantive, full of cooperation initiatives, and focused on highlighting the benefits of balanced social, economic, and financial development across the entire community area. In an era when artificial intelligence is fundamentally transforming market logic and China is investing massively in "swarm intelligence" and advanced production systems, Europe must decide whether it will be an active participant in this transformation or merely a passive observer. For Central and Eastern Europe and the Western Balkans, the choice is even more critical: will they leverage the momentum of Chinese investments to accelerate their own modernization, or will they become an arena of rivalry between China and the EU, losing the historic chance for autonomous development and technological advancement.
The article presents the stance of the author and does not necessarily reflect the stance of IFIMES.
Ljubljana/ Warsaw, 29 April 2026
[1] IFIMES – International Institute for Middle East and Balkan Studies, based in Ljubljana, Slovenia, has Special Consultative status at ECOSOC/UN, New York, since 2018 and it’s publisher of the international scientific journal “European Perspectives”, link: https://www.europeanperspectives.org/en
