China's AI Race Shifts From Models to Agents

China is pivoting from large language model competition to agent deployment. Beijing recognizes it cannot match OpenAI or Anthropic at frontier model capability, so it is repositioning toward practical automation where local language, regulatory alignment, and operational integration matter more than raw benchmark scores. This mirrors how China succeeded in mobile and e-commerce by skipping the "best technology" phase and moving directly to deployment and monetization. Western AI companies will face entrenched competition not in research papers but in actual enterprise workflows, telecom infrastructure, and government systems where agents are already embedded.