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"Compared to the demands of application scenarios for AI algorithms, the supply is less than 1 percent," Yin said. That is especially the case when it comes to facial recognition technology's application industries such as transportation and finance, which have stringent demands for precision, security and safety.

"City authorities drafted a development plan for the LED industry early in 2008 when the coal market was still booming," he said. "When the market stagnated in 2013, the provincial authorities arranged for coal company employees to visit LED manufacturers to learn about the industry."

"Cultural trends need to be discovered, and then to be followed to maintain vibrancy," Wang said.

"China's demographic dividend is disappearing," Wang Bin, co-founder and president of the venture and technology-focused media platform iyiou, said during a recent annual innovation conference in Beijing, adding that seniors can be relied upon as a reliable market.

"Chinese companies, especially those in the high-tech sector, need to work closely with overseas companies in their going global strategy," said Gong.