China’s brain-computer interface (BCI) industry is rapidly advancing, positioning the country as a major player in the global race to develop neural technologies. While Elon Musk’s Neuralink often claims to be at the forefront, China is making significant strides in both invasive and noninvasive BCI development, driven by strong policy support, robust clinical infrastructure, advanced manufacturing, and growing investment. Phoenix Peng, a pioneer in the field and co-founder of NeuroXess—a developer of implantable BCIs—as well as founder and CEO of Gestala, a startup focused on noninvasive ultrasound-based BCIs, believes China is already transitioning from research to commercialization. He points to concrete progress: provinces like Sichuan, Hubei, and Zhejiang have established medical pricing for BCI procedures, paving the way for inclusion in the national health insurance system. Peng envisions BCI evolving beyond treating neurological disorders to enhancing human capabilities. “Neuroscience and AI are two sides of the same coin,” he says. “BCI will be the ultimate bridge between carbon-based and silicon-based intelligence—creating a future market of unimaginable scale.” Four key factors are accelerating China’s BCI momentum. First, strong government backing includes a national roadmap launched in August 2025 by China’s industry ministry and six other agencies. The plan sets technical targets for 2027, aims for unified industry standards by 2030, and seeks to build a full domestic supply chain. A 11.6 billion yuan ($165 million) brain science fund was announced at the 2025 Shenzhen BCI & Human-Computer Interaction Expo to support startups from research to market. Second, China’s vast clinical resources—large patient populations and lower trial costs—enable faster validation. With national health insurance covering approved devices, commercialization is quicker than in the U.S., where private insurers must approve each product individually, or in Europe, where regulatory and privacy standards are stringent. Third, China’s mature manufacturing ecosystem—spanning semiconductors, AI, and medical devices—supports rapid prototyping and scaling. Fourth, investment is surging. In February 2025, Shanghai-based StairMed Technology raised $48 million in Series B funding. BrainCo, a leader in noninvasive BCIs and bionic limbs, has filed for a Hong Kong IPO after securing $287 million earlier in the year. Gestala, founded in January, is preparing to close an angel round. China’s BCI market is projected to grow from 3.2 billion yuan in 2024 to over 530 million yuan in 2025, with estimates suggesting it could reach 120 billion yuan by 2040. BCIs fall into two main categories. Invasive systems, like those from NeuroXess and Neuralink, use implanted electrodes for high-precision brain signal detection but require surgery. Noninvasive systems, such as those from BrainCo and NeuroSky, are safer and more accessible but offer lower resolution. Emerging approaches—ultrasound, magnetoencephalography, transcranial magnetic stimulation, optical methods, and hybrid systems—are expanding the field’s potential. Gestala’s ultrasound-based BCI targets conditions like chronic pain, stroke, and depression. Early trials show a single session reduces pain scores by 50%, with effects lasting one to two weeks. The company plans to launch its first product by the third quarter of 2025. Investors like HongShan Capital (formerly Sequoia China) are backing firms like Zhiran Medical, which develops flexible, high-performance implants to reduce inflammation and signal degradation. “Some technologies look advanced but aren’t practical,” says partner Yang Yunxia. “The real test is whether they can become sustainable businesses.” Over the next five years, China is expected to align its BCI regulations with international standards from bodies like IEC and ISO, while strengthening oversight on invasive devices and data privacy. Ethical frameworks will expand beyond medical use, with stricter informed consent and unified clinical evaluation standards. As China accelerates its BCI ambitions, it’s no longer just catching up—it’s setting its own pace.