China’s AI dream is well on its way to becoming a reality

All the major economies in the world understand the strategic importance of artificial intelligence in empowering and transforming economic growth in the coming decades. China is no exception. In July 2017, China’s State Council laid out an ambitious AI strategic plan to create a domestic 1 trillion yuan (US$147.80 billion) AI industry and make China the world’s leading AI innovation centre by 2030. Although too early to say if China will succeed, all the factors seem to be in China’s favour, such as market readiness, start-up money, talent, and supportive government policies and budget.

Over the past decade, China’s vast population has shown great eagerness and willingness to embrace various new technologies. Take the rapid growth of China’s smartphone industry as an example: over the past 10 years, it has grown from a single-digit penetration rate to over 50 per cent in 2017. 

The growth in social media use is also just as incredible. WeChat’s monthly active users went from 100 million in 2012 to over 1 billion in early 2018. China is also a leader in the adoption of digital payment. In urban areas, China has practically gone cashless. In 2016, the US had US$112 billion worth of mobile payments while, in China, mobile payments totalled US$9 trillion, according to a report by Forrester Research. 

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Chinese citizens seem to be embracing AI with similar enthusiasm, using AI face recognition for payment authentication. AI machine learning has a great thirst for data. The more data it has, the more accurate and precise are its results. And China has endless streams of data, with the majority of its 1.4 billion population online daily. It’s AI face-recognition technology is now one of the most advanced in the world because of the availability of training data.

The leading face-recognition technology companies in China, SenseTime and Face++, both started only a few years ago and have now already received more than US$1 billion each from investors. As of April 2018, SenseTime is valued at US$4.5 billion, making it the most valuable AI startup in the world. Besides face recognition, China is applying AI to health care, self-driving cars, traffic management, and various smart city applications. Unlike other economies, China’s citizens are more willing to adopt technology first, rather than wait for related privacy regulations.

China is also leading in technology investment. In a recent study from CB Insights, of the US$15.2 billion invested in AI start-ups globally in 2017, 48 per cent went to China, and only 38 per cent to US. For the first time, China’s AI start-ups surpassed those in the US in terms of funding. While the US still has more AI start-ups than China, the gap is starting to narrow. The US accounted for 77 per cent of startups in 2013, but fell to 50 per cent in 2017. In general, AI start-up investment rose 141 per cent in 2017, compared with 2016 with 1,100 new start-ups.

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Talent wise, China is also leading in AI research. The AI report by then US president Barack Obama’s administration indicated that the number of AI research papers as well as the quality of research from China surpassed the US as early as 2014. In 2015, China produced 50 per cent more research papers on AI than the US. However, even so, with the explosive growth of AI in China, there is still a big shortage of researchers.

In 2016, the Chinese information technology ministry estimated the industry needed an additional five million AI workers. This shortage is a worldwide phenomenon and not unique to China. Chinese firms are now enticing AI talent to work in China through higher pay, as well as through government schemes such as the Thousand Talents Plan, the Ten Thousand Talents Programme and the Yangtze River Scholar Award.

Nurturing new talent is just as important as attracting existing talent, and the Chinese government realises this. China’s AI road map calls for increased education in coding and AI at the primary- and middle-school levels. This will mean children in China will be learning coding earlier than in other countries. 

In addition, this month, the Ministry of Education launched a five-year AI talent training programme, under which at least 500 teachers and 5,000 students will be trained at top universities. At the same time, the ministry released a comprehensive “AI Innovation Action Plan for Colleges and Universities” to cultivate talent in support of China’s 2030 AI goals. The plan calls for new AI teaching and research facilities as well as new courses, both offline and online, and the creation of 100 “AI+X” cross-disciplinary studies.

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Government support is the last, but not least, factor in innovation success. The Chinese government has been very vocal in its desire to push AI. It is committed not only in word and strategy, but is also investing heavily in AI academic research and research infrastructure. The government is planning to invest hundreds of billions of yuan in AI in the coming years. For example, in January, the government announced it will spend 13.8 billion yuan (US$2.1 billion) to build a giant AI industrial park in the suburban Mentougou district in Beijing. The park will house over 400 companies that will focus on developing products and services in cloud computing, big data, biorecognition and deep learning. 

AI will also benefit from China’s “Belt and Road Initiative”, which promotes economic cooperation among countries across Asia, Europe and Africa. The initiative opens new markets for China’s products and services, including technology such as AI. For example, Alibaba Cloud recently launched a project with Malaysia called City Brain, which uses AI, big data, and cloud technologies to support smart city applications, such as intelligent traffic management.

We will know within a few years whether China’s AI strategy will succeed or not. However, so far, no other country has been as aggressive in promoting AI. 

Dr. Andy Chun is an associate professor at City University of Hong Kong and convenor of the AI Specialist Group at Hong Kong Computer Society. A version of this article was previously published in CPI:A, the online journal of the China Policy Institute from the University of Nottingham, UK