AI in China: What it means to be a tech leader

With AI the new battleground for innovation and development, no country wants to be left behind. But with the announcement last July of president Xi Jinping’s plans to build a US$152.5 billion AI industry by 2030, China is openly staking more than most on becoming a leading player in the field.

While the US is still ahead at present, consulting firm Frost & Sullivan’s greater China president, Neil Wang, believes that China has good reason to feel optimistic about its role in a future defined by AI based both on the country’s wide range of industries and its advanced algorithms at the application level.

The most progress, says Wang, has been made in the fields of driverless technology—China plans to include automated or assisted driving in every car by 2026 to 2030, says Wang.

“China is on a par with other countries in terms of algorithm development,” he says. “Chinese players have achieved breakthroughs in developing AI algorithms used in voice recognition and targeted advertising. Currently, Chinese companies are able to quickly replicate the most advanced algorithms developed anywhere in the world.”

Being a tech leader in China over the last 15 years used to mean investing in companies that could solve basic everyday problems: things like food delivery, messaging friends or hailing cabs.

“Nowadays the environment is a lot more similar to the United States, where you have to be truly revolutionary to stand out, a sentiment that has the full support of the central government which is committed to making Chinese AI the envy of the world by 2030,” says Andrew Zipparo, associate creative director at Jack Morton Worldwide.

This seems an achievable goal. It wasn’t that long ago, after all, that China said it wanted to build the world’s most advanced high speed rail system—it has now done so. Zipparo says that AI in healthcare, in particular, is on a similarly fast-moving trajectory, leading to developments that he expects to impact on other industries.

“The next big players will be in healthcare, and we’ve already seen this with startups like Beijing-based Koboro and its ‘Daxia Health’ app that uses learning to help doctors develop better diagnoses and treatment plans for their patients—programmes can even give second opinions on diagnostic imaging and lab results,” says Zipparo.

For China to achieve its ambition of being both a leader and an innovator in AI, however, it must move beyond the mass commoditisation of technology. Moreover, China does not yet have the same kind of vibrant AI ecosystem as the United States.

“The US ecosystem is large, innovative and diverse, including research institutions and universities as well as private companies,” says Frost & Sullivan’s Wang.

“Academic performance is another area of focus - China needs to bolster its capacity for innovation. For example, while Chinese academics have actually published even more papers on AI than US researchers, their papers have not generated the same impact as those by US or UK authors.”

Zoe Cheng, director, business development at brand engagement agency X2 Creative also cautions that while China is nurturing local talent to lead and grow the industry, it remains heavily reliant on attracting international talent for AI and technology development.

Until China can overcome some of the legal challenges presented by AI, including in the fields of intellectual property and the disputed ‘citizenship’ rights of AI robots, she continues, its reputation as a tech leader will not be sealed.

“China can’t rely on copycat models and legal protection to keep innovating, but needs to invest further in brand new challenging technology,” she says. “But we can see that China’s innovation is growing at a vast rate, especially within data and the Internet of Things.”

With great power comes great responsibility. As FreemanXP’s Etienne Chia, VP head of digital and strategy for APAC, points out, China’s biggest advantage is the size of its domestic market.

While all indicators seem to point to China rapidly closing the gap with the US when it comes to AI innovation, Chia warns that the rapid progression of AI and machine learning has the potential to be highly disruptive and even dangerous if left unchecked, particularly in the hands of short-sighted corporations seeking a quick windfall.

“This is why it is so important for China to be exemplary in providing the proper ethical and regulatory guidelines for other Asian markets to follow,” he says.