Empowering Chinese SMEs through Artificial Intelligence: Improving Efficiency through Strategic Adoption

Abstract

This paper explores how artificial intelligence (AI) can support the digital transformation of Chinese small and medium-sized enterprises (SMEs) in economic management. Although SMEs play a critical role in China’s economy, many face barriers such as limited data infrastructure, talent shortages, high costs, and regulatory challenges under the Personal Information Protection Law (PIPL). Drawing on international practices and four Chinese case studies—Inceptio Technology, Club Factory, JUSDA, and Ping An Smart Healthcare—this study proposes five practical strategies: incremental digitization, ecosystem collaboration, MVP piloting, human centered transformation, and privacy first design. The findings suggest that with phased deployment and external partnerships, SMEs can effectively adopt AI without relying on full in-house capabilities.