Artificial Intelligence, Industrial Integration, and Industrial Restructuring and Upgrading in China

Abstract

Boosting the intelligent, green, and integrated development of industries is fundamental to building a modern industrial system. Among them, promoting industrial integration serves as the industrial bedrock for advancing the construction of this system and accelerating the emergence of new quality productive forces. Producer services’ inherent integrative specialty positions them as a key direction for China ’ s industrial restructuring and upgrading. Analysis based on cross-national data reveals that the share of producer services remains relatively low in China, indicating untapped potential for driving economic growth. As a strategic general-purpose technology driving the new wave of technological revolution and industrial transformation, artificial intelligence (AI) shifts industrial development from stronger specialization to mutual integration, becoming a critical tool for accelerating industrial integration and promoting the development of producer services. This paper develops a multi-sector dynamic general equilibrium model that incorporates AI and industrial integration . The findings suggest that when AI is biased toward manufacturing and the elasticity of substitution between manufacturing and producer services is low, AI promotes the integration of manufacturing and producer services, thereby increasing the share of producer services through intensive marginal effects. Simulation results demonstrate that AI can effectively promote industrial integration and industrial restructuring and upgrading . Furthermore, raising new infrastructure investment rates and reducing labor mobility costs across service sectors can further promote industrial integration and accelerate the development of producer services. This paper presents the theoretical mechanism through which AI affects industrial integration and industrial restructuring and upgrading from a macroeconomic structure perspective and provides policy recommendations on how AI can promote industrial integration and develop producer services.

Keywords

artificial intelligence (AI) / industrial integration / producer services / industrial restructuring and upgrading

RIGHTS & PERMISSIONS

Higher Education Press