The Internet of Things (IoT) is an important component of the new digital infrastructure and is deeply integrated with the fifth-generation mobile communication (5G), big data, cloud computing, artificial intelligence (AI), blockchain, and digital twin. It is profoundly changing the technology system and promoting the digital economy, ushering in a new stage of smart IoT system in which everything is connected. This paper reviews the development status of IoT in China, proposes the concept of smart IoT system (IoT 2.0), and expounds on the implications, architecture, technical pedigree, and key enabling technologies. Practical cases of smart IoT system are explored considering the application scenarios of intelligent manufacturing, smart agriculture, smart grid, smart healthcare, intelligent transportation, and intelligent environmental protection, demonstrating the application values of the smart IoT system. Furthermore, we suggest that a technology integration innovation project that integrates IoT, AI, 5G, and new application field technologies should be implemented; focus should be placed on the research, development, and industrialization of intelligent products such as smart IoT systems / cloud native platforms / low-code (no-code) application development environments and toolsets, high-end sensors for smart IoT systems, and IoT chips / special components; and application demonstration of cloud-edge-end collaborative, autonomous controllable, safe, and credible smart IoT systems should be conducted.