Much has already been written on China’s plan to become an Artificial Intelligence (AI)’s world leader by 2030. These two trendy words also appear almost daily in the Chinese media and political communication. Thus, based on the analysis of governmental plan and the reading of the relevant press, this article seeks to depict today’s actual picture of AI in China; leaving aside announcement effects and articles looking for a mediatic buzz on a topic that both fascinates and worries.
What exactly do these plans contain? How do they impact Chinese society and economy? And which opportunities for foreign – particularly French – companies can be identified today?
At the Barcelona World Mobile Congress this year, Huawei was showing the world the first car entirely driven by a smartphone, using AI. This smartphone, issued last fall, was qualified as the first smartphone truly using AI. Besides the world reactions to the announcement that a smartphone effectively drove a car on ten meters and avoiding all obstacles on the road, it is interesting to note that China has today become unavoidable in discussing the advancements of AI technologies in the world. As such, Huawei was the first company to appear in a news story broadcasted by a European channel about the World Mobile Congress.
Become a major worldwide leader in AI in 2030
In the last past years, China issued several plans to structure its transition from the world workshop to the world laboratory. Innovation is a central part to the three following plans: Made in China 2025 (2015), Internet + (2015), and the 13th Five-Year Plan (2015) and is further developed in last July’s National Strategy for the development of AI.
The official target is to become a major world player in AI by 2030, with two middle-steps in 2020 and 2025. Eluding the numerous political and strategic objectives, we here explore the economic ones mentioned in the strategy. Indeed, this paper puts forward the figure of a 150M CNY (19,2M EUR) direct contribution to the Chinese economy by 2020 and of 1bn CNY (128M EUR) by 2030. The audit cabinet PwC were more optimist about these figures, forecasting a global contribution of AI to the world economy as large as 16bn USD (13bn EUR) by 2030 with half of it for the Chinese economy.
Privileged sectors for AI applications mentioned in the strategy and in the overall Chinese political communication are production, urban planning, agriculture, renewable energies, robotics, intelligent cars, medical care and national defense. However, the concrete encouraging mechanisms are still not known.
How much AI and which kind of AI is used in nowadays China? We seek here to understand where potentials for further development lie in China; knowing whether China or the US is leading the AI race is a topic for another discussion.
Governmental political and financial support
According to the global media reports and analysis, Chinese assets are: a supportive government in terms of financing and legislation (data protection is almost absent in the Chinese law as it is practiced), wide data resources thanks to a large, diverse and connected population, and scientific talents (20% of the world’s currently trained scientists in AI are Chinese). An interesting feature is that China is apparently better placed thanks to its talent in research on translation and language, due to the complexity of the Chinese language.
Proactive big players
In terms of data, China disposes of its own produced data (thanks to Baidu, Alibaba and Tencent, also called BAT). These data are sufficiently numerous and available thanks to a non-fragmented environment. Indeed, the pervasive application Wechat now counts more than 800 millions of accounts and is used by Chinese people to chat, but also to pay, localize themselves, rent taxis, bikes, order foods… Half of the Chinese smartphones are also equipped with online payment (see VVR article on this topic) and many observers comment on the general Chinese affection for connected objects. All in all, owning these data is a decisive asset nowadays as AI is merely a sophisticated calculating tool which improves through the processing of huge number of data. In other words, data are AI’s food. However, some scientists say they are today able to develop AI systems using simulated data. This would thus reduce in the long-run the advantage of American and Chinese groups who dispose of large sets of data.
China also owns strong calculus systems
Baidu’s image recognition is now more reliable than Google’s (by 0.3%) and Huawei’s last smartphone is equipped with microchips made in China. Yet, Chinese vocal recognition is still not as efficient as the American one; large investments are spent on it.
Capital is indeed the last trump in that game, and Chinese hand is full of it. BAT all recently made public their development roadmaps for AI. Baidu is investing 3bn EUR in image recognition, augmented reality, and deep learning while Alibaba announced the opening of 8 research centers for AI and quantum computing, an investment worth 15 bn USD (12,7 bn EUR). Baidu is also engaging in the development of self-driving car and made public in that context their will to put their data in opensource, contrary to American uses.
On the governmental side, Beijing made public their intention to invest in universities, incubators, and start-ups for an amount up to 150bn CNY (19,15bn EUR) with the objective of developping Chinese AI systems. More specifically, they announced beginning of this year the creation of a professional park dedicated to AI (focusing on big data, biometric identification and deep-learning) located in Beijing and gathering some 400 companies, an investment worth 13,8bn CNY (1,8bn EUR).
What about foreign companies in China?
Reading these facts, it appears that China is increasingly competitive in AI and intelligent technologies. Nevertheless, opportunities for foreign and French businesses also arise from this evolution: available investments, possibility to come to China, soon available trained manpower, efficient Chinese AI technologies and large data sets if these data are indeed put in opensource. Foreign and French businesses could also play an intermediary role between Chinese products and European business in that sector as The Economist describes the difficulty for Chinese AI to export itself. The coming China International Import Export Exhibition might thus be an interesting opportunity as an entire hall will be dedicated to high-end technology and intelligent equipment. It will take place in November 2018.
To sum up:
The various governmental publications lead us to expect a rise in the already abundant public and private investments for AI. The target of these investments are the development of AI technology and its applications in the following sectors: production, urban planning, agriculture, renewable energies, robotics, intelligent cars, medical care, and national defense. France made known its will to cooperate with China specifically in AI and according to the rhetoric used in governmental publications, China doesn’t wish to restrain this domain to its national businesses. Today, we can mostly assess Beijing favorable policies for the coming of foreign talents. Besides, research centers announced by private and public actors are not operating yet. Therefore, immediate opportunities for foreign and French businesses mainly lie in the needs that Chinese companies might have in terms of AI, or on the contrary, in the technologies that these companies might have developed.
By Manon Bellon