China aims to become a world leader in the field of artificial intelligence (AI) by 2030. This goal is linked to Beijing’s efforts to make its economy more innovative, modernize its military, and gain influence globally. While the US currently retains an edge in AI, China’s ambitions are likely to set off a new technology race. But does Beijing have the innovation capacity and strategy in place to achieve this goal ?
In the development of new technologies, the balance of power is shifting eastward. The People’s Republic of China (PRC), once “the workbench of the world”, is transforming itself into a serious competitor in the development of future key technologies. Especially in the field of AI, China’s ambitious activities receive widespread attention. The country is continuously gaining on the current leader, the US, and plans to become the world’s “Premier AI Innovation Center” by 2030.
Although the full potential of AI has yet to be revealed, it is already being touted as the “new electricity”. It is expected that AI will raise efficiency and precision across multiple sectors and could thus significantly boost societal wealth and national security. At the same time, fundamental issues arise. The transformation of labor markets, the diminishing human control over critical decision-making processes, the increasing influence in society of those who develop and deploy AI, and the resulting changes to the global balance of power are predictable effects of AI that have yet to be adequately explored.
Countries like Canada, Russia and the United Arab Emirates (UAE) have already identified AI as a key technology for the future. This is reflected, for instance, in the targeted efforts at industrial development and the formation of new structures, such as the UAE’s appointment of a Minister of AI in 2017. However, currently, the US retains an edge in the global advancement of AI, closely followed by China. In order to assess China’s ambitious progress in the field of AI, therefore, it is necessary to grasp the country’s capacity for innovation and its ambitions. According to Russian President Vladimir Putin, “whoever becomes the leader in this sphere [AI] will become the ruler of the world”.
Since 1978, when China’s leader Deng Xiaoping announced the “Open Door Policy”, signaling the start of the reform era, China has been transformed from a sealed-off agricultural society into the world’s second-largest national economy. It should be remembered, however, that its imposing economic growth was largely generated through a surplus of cheap labor and the transfer and imitation of technologies.
The Chinese government hopes that with its “Made in China 2025” program, it can eventually become a leading industrial power. In the future, it is hoped, “Made in China” will no longer be a byword for imitation and cheap, mass-produced goods, but will stand for innovation and high-quality products. The program is part of China’s broader goal to become an “innovative nation”, as was already stated in the 2006 National Medium- and Long-Term Plan for the Development of Science and Technology. The current 13th Five-Year Plan (2016 – 2020) is another example of how this goal is prioritized at the highest Party levels.
Artificial intelligence (AI) is the ability of a system to fulfill tasks that would ordinarily require human intelligence. The concept is frequently linked to systems imbued with capabilities linked to “intelligence”, such as learning, planning, and the ability to generalize. There is as yet no generally accepted definition of “AI”. A distinction is generally made between narrow and general AI. Narrow AI is able to carry out a specific task, such as translation between languages. General AI would have the same cognitive powers as the human mind and would be able to solve a variety of tasks. All existing AI applications, without exception, are regarded as narrow AI. Machine learning enables systems to learn without being explicitly programmed. Based on algorithms and huge datasets for training, systems learn to recognize patterns that had not previously been defined. The “knowledge” thus acquired can then also be applied to new data. This is a crucial development, not only in economic terms but also when it comes to the modernization of the People’s Liberation Army (PLA). At an event attended by lawmakers of the PLA in 2017, President Xi Jinping stressed that science and innovation were the keys to China’s military upgrading.
In order to build up an indigenous innovation capacity, China has been constantly raising its research and development (R&D) budget. In terms of overall expenditures, it is only surpassed by the US today. The government also fosters specific high-tech industries such as aerospace, quantum technology, and robotics. At the same time, since 1999, the “Go Out” strategy has encouraged companies and investors to expand and invest in overseas markets. Reforms have laid the groundwork for the creation of private technology companies that are now competing on an equal footing with leading Western companies. In addition to established market players like internet and AI giants Baidu, Alibaba, and Tencent, China’s corporate landscape also features a dynamic start-up scene. Already, one in three “unicorns” (up-and-coming corporations with a market value of over US$1 billion) are Chinese companies. However, China still lags behind other countries like the US in several sectors, including the semiconductor industry. In other areas, however, such as telecommunications and e-commerce, China has already developed a remarkable degree of innovation power. Today, the main question is not whether the country can be an innovator, but how innovative it will be when it comes to key future technologies.
In 2016, to the surprise of many, the Alpha Go computer program, developed by Google DeepMind, managed to beat professional Go player Lee Sedol at this complex strategy board game. Experts had believed that the development of a program that could master the game of Go was still years in the future. In retrospect, Lee Sedol’s defeat to Alpha Go is seen as a major wake-up call for China’s leadership, which proceeded to declare AI a national priority. In July 2017, the PRC’s State Council released the Next Generation Artificial Intelligence Development Plan (AI Plan), a comprehensive, all-of-nation strategy to advance the development of AI in China in three major steps: catching up with the West by 2020, overtaking it by 2025, and becoming the global leader by 2030. The document lists a number of ambitious targets but remains vague when it comes to strategies for achieving them. However, the plan’s main purpose is to show that AI is a top priority for the highest level of the Communist Party’s leadership. Thereby, an industrial development that is already underway should be accelerated. The Chinese government perceives AI as an opportunity to leapfrog foreign competitors. To this end, the domestic AI sector’s innovation capacity is supported with substantial financial resources for R&D. Training of new AI talents is set to begin already in primary school and will be intensified at the country’s universities. On the other hand, the plan is for international AI resources to supplement China’s indigenous innovation capabilities. The “Go Out” strategy incorporates mergers and acquisitions, venture capital and the establishment of overseas research and development centers.
The plan stipulates the introduction of AI across the economy and society including in manufacturing, the judicial system, and public safety. Another aspect of the AI Plan covers the technology’s military applications. Though the PLA so far has no official AI strategy, the urgency of rapidly and comprehensively adopting AI is acknowledged by its leadership. The PLA is already funding several research projects involving AI. Specifically, AI could be deployed for applications including data fusion and analysis, command-level decision support, swarm intelligence and the development of AI-equipped weapons. Looking forward, China’s ambitious innovation efforts and resources could prevent the US from developing an uncontested edge in AI and therefore have significant strategic implications.
The AI Plan also includes a critical review of China’s weaknesses. For instance, there has so far been no breakthrough in the development of high-end AI chips, which are required to train algorithms through machine learning. There is furthermore a severe shortage of experienced AI talents in China, a fact reflected in the aggressive recruitment strategies of Chinese companies both domestically and overseas.
The enormous potential of AI, the private sector’s leadership role in technology development, and the increasing interest of states in AI have created a new field of tension between national security and free market ideology. Control of AI resources is, however, significantly hampered by the mobility of AI talent and capital, the publication of research results, and the intangible nature of the software components of AI. Moreover, for many foreign tech firms, the Chinese consumer market is an increasingly attractive target.
While the US is still the leader as measured by many AI indicators, China’s ambitions should not be underestimated, given the considerable state support for the advancement and use of national and international AI innovation resources. Other enabling factors include the close linkage of private and state actors.
However, in the long term, China might benefit not only from its own efforts but also from the fact that the US lacks an AI strategy of its own. The decline of openness of the US innovation system and disregard for the importance of promoting science and technology research and education could tilt the balance of power in the development of key technologies further towards China.
If the PRC’s ascent to become an “AI superpower” is successful, the implications for the international community will be significant. It remains to be seen, however, whether China will shape this development in a cooperative or a confrontational manner.