Artificial intelligence industry in China

The State Council of China issued the "A Next Generation Artificial Intelligence Development Plan" (State Council Document [2017] No. 35) on July 8, 2017, in which the CCP Central Committee and the State Council urged the governing bodies of China to promote the development of artificial intelligence. Specifically, the plan describes AI as a “strategic technology” that has become a “focus of international competition”.[5]^:2 On the occasion of CCP general secretary Xi Jinping's speech at the first plenary meeting of the CMCFDC, scholars from the National Defense University in their analysis of the integration of military and civilian development wrote in the PLA Daily that the "transferability of social resources" between economic and military ends is an essential component to being a great power.[6]

In 2018, the State Council budgeted $2.1 billion on an AI industrial park in Mentougou district.[7] In order to achieve this end, the State Council states the need for massive talent acquisition, theoretical and practical developments, and public and private investments.[5]

Some of the stated motivations that the State Council has given for pursuing its AI strategy include the potential of artificial intelligence for industrial transformation, better social governance and maintaining social stability.[5] The State Council reports three general milestones for their integration of artificial intelligence into their industrial economy.[5] By 2020, the State Council predicts that China will have contributed globally to hardware, software, and methods pertinent to artificial intelligence. Specifically, the State Council projects the value of AI core industry in China to be worth 150 billion RMB, with a value of over 1 trillion RMB when accounting for related industries.[5]

By 2025, the State Council aims for China to have fundamentally contributed to basic AI theory, solidifying its place as a global leader in AI research. Further, the State Council aims that "AI becomes the main driving force for China's industrial upgrading and economic transformation" by this time. The State Council projects the value of AI core industry in China to be worth 400 billion RMB, with a value of over 5 trillion RMB when accounting for related industries.[5]

By 2030, the State Council targets China to be the global leader in the development of artificial intelligence theory and technology. The State Council claims that China will have developed a "mature new-generation AI theory and technology system." At this point, the State Council projects the value of AI core industry to be worth 1 trillion RMB, with a value of over 10 trillion RMB when accounting for related industries.[5]

According to a February 2019 publication by the Center for a New American Security, China’s leadership – including Chinese leader Xi Jinping – believes that being at the forefront in AI technology will be critical to the future of global military and economic power competition.[8] China is by far the United States’ most ambitious competitor in the international AI market, and China's 2017 “Next Generation AI Development Plan” describes AI as a “strategic technology” that has become a “focus of international competition”.[5]^:2 According to the document, China will seek to develop a core AI industry worth over 150 billion RMB132—or approximately $21.7 billion—by 2020 and will “firmly seize the strategic initiative” and reach “world leading levels” of AI investment by 2030.[5]^:2-6 Recent Chinese achievements in the field demonstrate China's potential to realize its goals for AI development. In 2015, China's leading AI company, Baidu, created AI software capable of surpassing human levels of language recognition, almost a year in advance of Microsoft, the nearest U.S. competitor.[9] In 2016 and 2017, Chinese teams won the top prize at the Large Scale Visual Recognition Challenge, an international competition for Computer vision systems.[10] Many of these systems are now being integrated into China's domestic surveillance network and Social Credit System, which aims to monitor and, based on social behavior, “grade” every Chinese citizen by 2021.[11]

China is researching various types of air, land, sea, and undersea autonomous vehicles. In the spring of 2017, a civilian Chinese university with ties to the military demonstrated an AI-enabled swarm of 1,000 uninhabited aerial vehicles at an airshow. A media report released after the fact showed a computer simulation of a similar swarm formation finding and destroying a missile launcher.[1]^:23 Open-source publications indicate that China is also developing a suite of AI tools for cyber operations.[1]^:27 [12]

Chinese development of military AI is influenced in large part by China's observation of U.S. plans for defense innovation and fears of a widening “generational gap” in comparison to the U.S. military. Similar to U.S. military concepts, the Chinese aim to use AI for exploiting large troves of intelligence, generating a common operating picture, and accelerating battlefield decision-making.[1]^:12-14[12]

China's management of its AI ecosystem contrasts with that of the United States.[1]^:6 In general, few boundaries exist between Chinese commercial companies, university research laboratories, the military, and the central government. As a result, the Chinese government has a direct means of guiding AI development priorities and accessing technology that was ostensibly developed for civilian purposes. To further strengthen these ties, the Chinese government created in January 2017 a Military-Civil Fusion Development Commission, which is intended to speed the transfer of AI technology from commercial companies and research institutions to the military.[1]^:19[2] In addition, the Chinese government is leveraging both lower barriers to data collection and lower costs to data labeling to create the large databases on which AI systems train.[13] According to one estimate, China is on track to possess 20% of the world's share of data by 2020, with the potential to have over 30% by 2030.[1]^:12[12]

China's centrally directed effort is investing in the U.S. AI market, in companies working on militarily relevant AI applications, potentially granting it lawful access to U.S. technology and intellectual property.[14] Chinese venture capital investment in U.S. AI companies between 2010 and 2017 totalled an estimated $1.3 billion.[15][12]

Although Peking University introduced in 2004 the first academic course on AI which led other Chinese universities to adopt AI as a discipline,[7] China faces challenges in recruiting and retaining AI engineers and researchers. Over half of the data scientists in the United States have been working in the field for over 10 years, while roughly the same proportion of data scientists in China have less than 5 years of experience. As of 2017, fewer than 30 Chinese universities produce AI-focused experts and research products.[16]^:8 Although China surpassed the United States in the quantity of research papers produced from 2011 to 2015, the quality of its published papers, as judged by peer citations, ranked 34th globally.[17] China is, however, making efforts to address these deficiencies, with a particular focus on the development of military AI applications. Indeed, the Beijing Institute of Technology, one of China's premier institutes for weapons research, recently established the first children's educational programme in military AI in the world.[18][12]

Leading AI-centric companies and start-ups include Baidu, Tencent, Alibaba, SenseTime[19][20] and Yitu Technology.[19][20] Chinese AI companies iFlytek, SenseTime, Cloudwalk and DJI have received attention for facial recognition, sound recognition and drone technologies.[21]

An article published by the Center for a New American Security concluded that "Chinese government officials demonstrated remarkably keen understanding of the issues surrounding AI and international security...this includes knowledge of U.S. AI policy discussions." and recommended that "the U.S. policymaking community similarly prioritize cultivating expertise and understanding of AI developments in China" and "funding, focus, and a willingness among U.S. policymakers to drive large-scale necessary change."[22] An article in the MIT Technology Review similarly concluded: "China might have unparalleled resources and enormous untapped potential, but the West has world-leading expertise and a strong research culture. Rather than worry about China’s progress, it would be wise for Western nations to focus on their existing strengths, investing heavily in research and education."[23]

Some experts believe that China's intent to be the first to develop military AI applications may result in comparatively less safe applications, as China will likely be more risk-acceptant throughout the development process. These experts stated that it would be unethical for the U.S. military to sacrifice safety standards for the sake of external time pressures, but that the United States’ more conservative approach to AI development may result in more capable systems in the long run.[12]^:23

• Artificial intelligence
• Artificial intelligence arms race
• China Brain Project
• Regulation of artificial intelligence