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China's virtual digital human industry traces its recognizable modern origins to late 2016, when the character Kizuna AI uploaded her first video to YouTube on November 29, popularizing the term "Virtual YouTuber" and catalyzing a global wave of interest in AI-driven virtual personas. While Kizuna AI was not the first computer-generated avatar to appear on YouTube (the British creator Ami Yamato had been active since 2011), she was the first to brand the concept as a distinct content category and build a mass following around it. Two years later, at the 5th World Internet Conference in Wuzhen on November 7, 2018, Xinhua News Agency and Sogou jointly unveiled an AI synthetic news anchor named Xin Xiaohao, modeled on the real anchor Qiu Hao and powered by Sogou's Avatar technology. Marketed as the world's first AI synthetic anchor, the project expanded rapidly through subsequent iterations: a standing version appeared in February 2019, a female anchor named Xin Xiaomeng followed in March 2019, and a full 3D version called Xin Xiaowei debuted in May 2020.
The financial sector moved quickly to adopt the technology. In 2019, Shanghai Pudong Development Bank partnered with Baidu Intelligent Cloud to develop Xiaopu, described as the banking industry's first digital employee. The concept was announced in April 2019, demonstrated publicly at the Baidu AI Developer Conference in July, and formally launched on December 13 of that year. The same month, January 2019, saw the CCTV Network Spring Gala introduce digital twin hosts co-presenting alongside their human counterparts, an event widely described in Chinese media as a global first for national-level broadcasting. The digital twin of host Sa Beining, named Xiao Xiao Sa, was created not by Baidu, as is sometimes reported, but by ObEN, a US-based AI company. Baidu's involvement was with the separate main CCTV Spring Festival Gala, where it served as a red-packet sponsor.
By the early 2020s, the virtual digital human ecosystem had extended well beyond news and banking. The virtual beauty influencer Liu Yexi debuted on Douyin on October 31, 2021, created by Hangzhou-based Chuangyi Technology. Styled as a supernatural being who catches demons, she gained over one million followers within 24 hours and attracted roughly 3.6 million likes on her first video. In weather broadcasting, Huafeng Weather Media Group, a subsidiary of the China Meteorological Administration, collaborated with Xiaoice to produce the digital host Feng Xiaoshu, modeled on the real presenter Feng Shu and built using Xiaoice's deep neural network rendering digital twin technology. Feng Xiaoshu was first deployed during the 2022 Beijing Winter Olympics.
The gaming industry proved to be another major proving ground. China's game market reached approximately 2,308.8 billion yuan in actual sales revenue in 2019, according to official data from the Game Publishing Committee of the China Audio-Video and Digital Publishing Association and IDC. Role-playing games accounted for roughly 30 percent of the total market, and user growth had slowed markedly, with only about 10 million new users added compared to 2018. In this maturing landscape, companies turned to AI-driven virtual characters to enhance player engagement. NetEase's Fuxi Lab, established in 2017 as China's first dedicated game AI research institution, applied virtual human technology, intelligent NPCs, AI-driven expression synthesis, 4D facial scanning, and text-to-face generation to the MMORPG Justice Online. In February 2025, Fuxi integrated DeepSeek into the same title, extending its AI capabilities further.
Market projections have tracked a steep growth curve. According to iiMedia Research, the core virtual digital human market in China reached 120.8 billion yuan in 2022, growing 94.2 percent year-on-year. The broader peripheral market stood at approximately 1,866.1 billion yuan the same year. By 2023, the core market had expanded to 205.2 billion yuan and the peripheral market to 3,334.7 billion yuan. Figures for 2024 placed the core market at 339.2 billion yuan and the peripheral market at 4,785.3 billion yuan. Forecasts project the core market reaching roughly 480.6 billion yuan by 2025, a figure broadly corroborated by the China Internet Development Association's estimate of over 400 billion yuan, with the peripheral market expected to reach approximately 6,402.7 billion yuan. Looking further ahead, iiMedia projects the core market will hit 935.6 billion yuan and the peripheral market 10,468.6 billion yuan by 2030. Consumer-facing virtual digital human products account for approximately 36 percent of consumer application scenarios, according to a compilation by the 21st Century Business Herald drawing on iiMedia and Qianji Investment Bank data. Meanwhile, China's broader AI large model market reached 294 billion yuan in 2024, more than doubling year-on-year, and over half of surveyed Chinese enterprises reported having used virtual human technology.
The live streaming and entertainment sectors have contributed significantly to this expansion. Video live broadcast revenue in China reached 1,082 billion yuan in 2019, a figure attributed to the Qianzhan Industry Research Institute. A 2019 report by iQiyi found that 390 million people in China were either following or expressed interest in following virtual idols, though that figure encompassed both active followers and those merely considering engagement with the category. The Bilibili Macro Link event series drew viewership figures in the millions for its VR livestream component.
In the financial sector, technology investment by China's major banks has risen dramatically. China Construction Bank led in 2019 with technology spending of 17.633 billion yuan, followed by ICBC at 16.374 billion yuan, Agricultural Bank of China at 12.79 billion yuan, and Bank of China at 11.654 billion yuan. By 2024, the six state-owned banks' combined technology investment had grown to 1,254.59 billion yuan, up from 716.76 billion yuan in 2019. ICBC became the first major state-owned bank to deploy virtual digital human services, launching digital employees Gong Xiaozheng and Gong Xiaocheng on its mobile banking app in July 2023, with the internal-facing Gong Xiaoban also in operation. A report published by the China Banking Association in the 2024 to 2025 period documented eleven banks with deployed virtual digital humans, including ICBC, CCB, Bank of Communications, Postal Savings Bank of China, China Everbright Bank, China Merchants Bank, SPD Bank, China Minsheng Bank, Ping An Bank, Hangzhou Bank, and Changsha Bank, with five more in preparation.
The technology classification framework most commonly associated with the industry is the L1 through L5 automation hierarchy developed by the SenseTime Intelligence Research Institute, published in a white paper co-produced with the CARA alliance in April 2022. The framework ranges from L1, denoting CG-based static imagery, through L2 for motion-capture-driven systems, L3 for data and algorithm-driven systems with limited real-time interaction, L4 for real-time AI-generated figures with contextual understanding, and L5 for fully autonomous digital humans with self-learning capability. SenseTime's research institute also identified three defining characteristics of virtual digital humans: multimodal interaction, deep learning capabilities, and AIGC productivity. In August 2024, IDC published its MarketScape assessment of China's AI digital human products, evaluating sixteen vendors including Baidu, Mobvoi, Fengping Intelligence, Silicon Intelligence, Huawei, JD.com, MoFa (Shanghai) Information Technology Co., Ltd. (魔珐（上海）信息科技有限公司), iFlytek, SenseTime, TRS, Tencent, Xiaoice, AsiaInfo Technologies, Zhongke Huilian, Zhongke Shenzhi, and Zhuiyi Technology.
On the policy front, a series of national-level documents have shaped the regulatory and strategic environment. In May 2016, the CPC Central Committee and State Council issued the National Innovation-Driven Development Strategy Outline, which called for strengthening research in human-like intelligence, natural interaction, and virtual reality technologies. In August 2019, six departments including the Ministry of Science and Technology, the Central Propaganda Department, the Cyberspace Administration of China, the Ministry of Finance, the Ministry of Culture and Tourism, and the National Radio and Television Administration jointly issued the Guiding Opinions on Promoting Deep Integration of Culture and Technology. In August 2020, the National Film Administration and the China Association for Science and Technology jointly issued opinions on promoting the development of science fiction films, colloquially known as the "Ten Sci-Fi Measures." The Ministry of Industry and Information Technology issued the Three-Year Action Plan for New Data Centers in July 2021, and the State Council released the 14th Five-Year Plan for Digital Economic Development, signed in December 2021 and publicly released on January 12, 2022. At the municipal level, the CPC Beijing Municipal Committee and the Beijing Municipal People's Government jointly issued opinions on leveraging data elements to accelerate digital economic development in July 2023.
The most significant regulatory development came on April 3, 2026, when the Cyberspace Administration of China published draft Measures for the Administration of Digital Virtual Human Information Services for public comment. The draft regulation comprises 27 articles across five chapters and introduces mandatory labeling of all digital human services, requires explicit consent for the use of personal biometric data in digital human creation with deletion rights upon consent withdrawal, and establishes specific protections for minors including prohibitions on virtual relatives, virtual partners, consumption inducement, and religious content directed at children. The measures also prohibit the use of digital humans to bypass facial or voice recognition systems or to create fraudulent accounts, and establish a tiered penalty structure ranging from 10,000 to 100,000 yuan for standard violations and 100,000 to 200,000 yuan for violations that endanger life or health. The regulation builds on existing frameworks including the deep synthesis provisions and the generative AI regulations that took effect in August 2023.
Among the publicly listed companies active in the space, several merit attention. Chinese Online (中文在线, 300364.SZ) operates the interactive visual novel platform Chapters, launched in 2017 through a US subsidiary and available in over sixteen languages, as well as the My Escape platform, the short-drama platform ReelShort, and others. Alpha Entertainment (奥飞娱乐, 002292.SZ) holds major animation IPs including Pleasant Goat and Big Big Wolf and Super Wings, and in 2023 partnered with Xiaoice to create virtual digital humans for these properties, co-founding Guangzhou Aochuang Huozhong Technology. Huace Film and Television (华策影视, 300133.SZ) has expanded into AI and computing through its subsidiary Hangzhou Xinsuanyuanjie Technology. Mango Super Media (芒果超媒, 300413.SZ) operates Mango TV under the control of Hunan Broadcasting System. Yaowang Technology (遥望科技, 002291.SZ) signed a strategic agreement with Xiaoice on May 15, 2023, to develop AI-powered livestream e-commerce. Wondershare (万兴科技, 300624.SZ) operates the digital human video platform known in Chinese as Wanxing Bobao, with the official English product name Virbo. BlueFocus (蓝色光标, 300058.SZ) launched the virtual human Su Xiaomei on January 1, 2022, managed through its subsidiary Blue Universe, and has also created the virtual musician K. Among the major technology firms, SenseTime underwent a leadership transition following the death of founder Tang Xiao'ou in December 2023 and has since pivoted toward generative AI while remaining listed on the Hong Kong Stock Exchange. iFlytek won a first prize in the 2024 National Science and Technology Progress Award and remains active in digital human platform development. Baidu and Xiaoice were both included in the 2024 IDC MarketScape assessment, with Baidu continuing to power digital human deployments in the banking sector. NetEase Fuxi expanded beyond gaming into engineering machinery AI under the NetEase Lingdong brand.
[Apr 2026]