From rule-taker to rule-maker: China’s AI challenge to US dominance

(Edited and refined by Grace Chong and Josephine Hong, with the assistance of AI translation.)

The China-US competition in artificial intelligence (AI) is moving beyond a contest over models and computing power into a struggle over technological ecosystems, international rules and global influence.

According to publicly available information, Chinese President Xi Jinping has made only three local inspection trips outside Beijing this year, visiting Xiong’an in Hebei, Dezhou in Shandong and Shanghai.

On 17 July, he travelled to Shanghai to attend the opening ceremony of the 2026 World Artificial Intelligence Conference (WAIC) and the High-Level Meeting on Global AI Governance, where he delivered a keynote speech. This was the first time that China’s top leader had attended this conference since it was launched in 2018, highlighting Beijing’s decision to elevate global AI governance to a national strategic priority.

One reason for this is that the US has shaped many of the internet-era rules over the past three decades. Beijing does not want China to once again be a mere rule-taker in the AI era. Another reason is that as AI becomes a critical technology shaping economic strength, military capability and international influence, China hopes to leverage this to secure a greater voice in global affairs.

Lessons from the internet era

Following the launch of the World Wide Web in 1990, the internet entered a period of rapid global expansion. With advantages in technology, capital and platforms, the US has for decades played a leading role in shaping the internet’s development.

Core protocols such as TCP/IP and the Domain Name System (DNS) were initially developed in the US, while the country’s leadership was also instrumental in establishing the internet’s early technical standards and governance framework.

Companies including Google, Apple, Microsoft, Amazon and Meta built major parts of the global internet ecosystem. Through organisations such as the Internet Engineering Task Force (IETF) and the Internet Corporation for Assigned Names and Numbers (ICANN), the US has also retained significant influence over internet standards and governance.

The US advantage has extended beyond technology into rule-making in areas such as the digital economy, data governance and cybersecurity. By leveraging its internet ecosystem, Washington has expanded its global influence, while ideas such as an open internet and freedom of information have spread worldwide.

China’s comprehensive national strength today is far greater than it was during the internet era, and Beijing wants to move from being a rule-taker to a participant in rule-making — and potentially a rule-shaper.

Based on Xi’s speech at the WAIC, Beijing’s push to establish the World Artificial Intelligence Cooperation Organization (WAICO), and its efforts to showcase its latest AI technologies, China’s AI strategy appears to have at least three major objectives.

Building a competing AI ecosystem

The first is the battle to shape the technological ecosystem, which comes down to a fundamental question: whose AI will the world use?

Although Xi did not explicitly mention Chinese AI models such as DeepSeek and Kimi, he placed particular emphasis on open source, openness, collaboration and sharing.

Facing US advantages in advanced AI chips through companies such as Nvidia, closed-source AI models developed by OpenAI and Anthropic, and the wider cloud computing ecosystem, China is positioning open source as its key competitive advantage.

By offering lower-cost models under open licences, Beijing hopes to attract more developers, businesses and governments to adopt Chinese AI models, thereby expanding the global reach of China’s AI ecosystem.

Shaping AI standards and governance

Xi emphasised China’s opposition to overstretching the national security concept in the field of AI and placing one country’s security over that of others. He also stressed that the “uniqueness of cultures of different countries” should not be eroded or undermined, and that the Global South must be supported in bridging the digital divide. 

By positioning AI as an “international public good”, Beijing hopes to shape its AI diplomacy narrative around open-source frameworks, cooperation and resource sharing, and multilateralism. This stands in stark contrast to the US’s approach of export controls and technological restrictions. If more countries adopt China’s AI ecosystem, Beijing will also be better placed to strengthen its influence over international AI standards and governance discussions.

WAICO versus Pax Silica

The third battle is to secure the power to set the agenda in global AI governance — essentially, determining who gets to organise the discussion on the rules.

By driving the establishment of WAICO, China aims to build a global platform for AI collaboration while using it to advance AI governance under the United Nations framework, thereby boosting its ability to set the agenda for global AI governance.

According to Chinese state media, 29 countries have signed the agreement to become founding members, though a complete official list has not been published. However, a breakdown provided by Indonesia’s Antara News Agency reveals that alongside China, the 28 other founding members include: Indonesia, Malaysia, Cambodia, Laos and Myanmar from ASEAN; Pakistan in South Asia; Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Belarus from the Commonwealth of Independent States; South Africa, Algeria, Cameroon, the Congo, Ethiopia, Kenya, Lesotho, Mozambique, Senegal and Zambia in Africa; Brazil, Cuba, Nicaragua and Venezuela in Latin America; Oman in the Middle East; and Serbia in Europe.

This initial batch of members hails predominantly from the Global South, aligning with Beijing’s recent diplomatic strategy of deepening ties across these regions. It also underscores Beijing’s ambition to leverage AI cooperation to expand its international influence. The membership list is expected to expand further.

In contrast, the US spearheaded the launch of the Pax Silica initiative in December last year, with 24 signatories, most of them advanced economies. At the Pax Silica Summit held in the US at the end of June this year, 35 countries, including the US, signed the Joint Statement on AI Opportunity.

No need to choose sides

Interestingly, Kazakhstan, a mineral-rich Central Asian country, appears in both the Chinese- and US-led initiatives. Antara also reported that consultations are underway for Indonesia’s participation in Pax Silica. During a press conference in Shanghai, Indonesia’s Coordinating Minister for Economic Affairs Airlangga Hartarto said that Jakarta hoped to maintain a balanced approach to AI cooperation with China and the US.

This suggests that countries do not necessarily have to choose one side over the other. Many are likely to pursue their national interests by maintaining flexibility across different technological ecosystems and governance frameworks.

The China-US AI rivalry is no longer just a race over who has the most advanced large language models or the strongest computing power. Rather, it has evolved into a contest over who can attract more countries into their respective technological ecosystems, win endorsement for their governance philosophies, and command greater institutional influence over global AI governance. 

While the power to shape AI rules is not synonymous with dominance over the global order, it will profoundly influence the future landscape of global tech governance. Consequently, the competition over rules, standards and institutional influence has emerged as the latest strategic battleground in China-US rivalry.

This article was first published in Lianhe Zaobao as “中美争夺AI时代全球影响力”.

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