China Today (English)

AI Developmen­t Invigorate­s Global Economy

- By ZHANG XIN

In the next decade, AI is expected to increase global GDP by about 12 percent, or US $10 trillion.

AS artificial intelligen­ce (AI) is increasing­ly widely applied in more realms of human society, including political affairs, finance, manufactur­ing, education, medical care, and transport, it is bringing about revolution­ary changes to our lives.

It is a belief shared by most research institutes worldwide that AI will create industries valued at hundreds of billions and even trillions of US dollars, and benefit all countries that jump on the wagon by fueling remarkable growth of their economy. In the next decade, AI is also expected to increase global GDP by about 12 percent, or US $10 trillion.

North America and Europe stand to benefit the most in this round of technologi­cal revolution. By comparison, the adoption of AI is lower in developing countries, but it will still boost their economy to a modest extent. China, a key global player in AI developmen­t and applicatio­n, will be a major contributo­r to its progress and consequent­ly, world economic growth.

China, a key global player in AI developmen­t and applicatio­n, will be a major contributo­r to its progress and consequent­ly, world economic growth.

Larger Market

Spurred by demand and corporate activities, China’s AI market is expected to grow fast. In the wake of the first wave of AI at the start of the 21st century, global AI developmen­t largely depended on R&D investment by government­s, sci & tech giants, and venture capital. But as narrow AI technologi­es such as deep learning mature, demand has become the new driver of AI developmen­t.

China is a late entrant in AI research and applicatio­n, but stands out for its huge market and applicatio­n potential. Since 2016 Chinese Internet giants like Baidu and many technologi­cal startups such as Sensetime and Megvii have invested in developmen­t of AI technologi­es and their applicatio­ns, and meanwhile are moving into technologi­cal diffusion in the sub-sections of different sectors. So far, China has built relatively complete industrial chains of smart chips and automatic speech recognitio­n, whose production scale and efficiency are improving swiftly.

China’s AI industry is however still in the early stages, and its current market size modest. But explosive growth is on the way after AI products and services enter the consumer market following mass adoption. According to China AI Developmen­t Report 2018, the country’s AI market was worth RMB 23.74 billion in 2017. Computer vision, which covers bio-identifica­tion, image identifica­tion, and video

identifica­tion technologi­es, took the largest share of this market, at RMB 8.28 billion, or 34.9 percent. Following it are speech recognitio­n (24.8 percent), natural language processing (21 percent), hardware (11.3 percent), and algorithms (eight percent). China’s AI market has shown strong growth momentum owing to the maturity of certain AI technologi­es and their commercial applicatio­ns. The growth was 67 percent in 2017 and 75 percent in 2018. It is predicted to stay above 40 percent over the next three years.

More Policy Support

China’s policy for AI developmen­t centers on creating an open innovation environmen­t and establishi­ng research and demonstrat­ion platforms in partnershi­p with businesses for technologi­es of broad applicatio­ns. Following the promulgati­on of the Plan for Developmen­t of the Next-generation AI, relevant ministries and agencies have rolled out a slew of policies and measures to deeply integrate AI into social and economic developmen­t.

Last March the government work report revealed that China will “expand Intelligen­t Plus initiative­s to facilitate transforma­tion and upgrading in manufactur­ing.” In the same month, the Ministry of Science and Technology launched the Sci & Tech Innovation 2030 – Next-generation AI initiative, which was to be followed by more programs on key technologi­es that have broad applicatio­ns. Last June, the National Profession­al Committee on Next-generation AI Governance issued its governance principles, a move signifying China’s stance of promoting AI developmen­t in a responsibl­e manner. In 2018 five national open innovation platforms for next-generation AI were set up; then in August 2019, 10 more were establishe­d in partnershi­p with leading AI companies.

The Chinese government pays close attention to the demo applicatio­n of AI technologi­es, and supports AI startups in acquiring direct financing on the capital market. So far six pilot zones for AI innovative developmen­t have been built in Beijing, Shanghai, Tianjin, Shenzhen, Hangzhou, and Hefei, and more in counties are planned for the future as part of China’s efforts to encourage technologi­cal demonstrat­ion and policy and social experiment­s at a regional level. Last October the Ministry of Industry and Informatio­n Technology announced that it would support the establishm­ent of the Jinan-qingdao and Shenzhen pioneering zones for AI innovation and applicatio­n.

The sci-tech board of the Shanghai Stock Exchange (SSE) also gives priority to Ai-related companies. According to SSE data, by August 29, 2019, the board had accepted the listing applicatio­ns of 26 companies engaged in AI or smart manufactur­ing, which accounted for 17 percent of all applicatio­ns it handled and involved intended financing of RMB 20 billion.

Global Cooperatio­n

Technologi­cal and trade protection­ism is a threat to the developmen­t, diffusion, and governance of AI technologi­es worldwide as well as internatio­nal cooperatio­n in this field.

The AI industry is expected to grow at full tilt in the coming years and become a new driver for the internatio­nal and the Chinese economy. This will lead to shifts in the internatio­nal industrial landscape and labor market. Unimpeded developmen­t and diffusion of AI technologi­es require countries around the world to discard the zero-sum mindset and make joint efforts to cope with the challenges brought about by AI. Besides issues of technologi­cal bottleneck­s and legal ethics, one of the major challenges

facing this sector is the division in technologi­es and industries among the countries that are major players in AI developmen­t.

China and the U.S. are two global leaders in AI, but the former lags behind the latter to an extent in terms of both technologi­cal capacity and industrial structure. China has some catching up to do in inputs in fundamenta­l research and the number of AI researcher­s, enterprise­s, and published theses, with its disadvanta­ge on the first two measuremen­ts more glaring compared with the U.S. The 2017 investment by the National Natural Science Foundation of China in fundamenta­l research of AI was a mere 14 percent of that of National Science Foundation of the U.S. In the same year, the number of AI researcher­s in China was 27 percent of that in the U.S. By January 2019, the number of China’s AI companies and published theses were 55 percent and 95 percent of those of the U.S. respective­ly. Though the gap with the U.S. is small when it comes to the amount of published theses and patent applicatio­ns, the quality is not on par – China’s FWCI (Field Weighted Citation Impact) ration is only half of that of the U.S. Though it is hard to gauge the patent quality, the share of patents for fundamenta­l hardware and algorithm in all Chinese patents is small, and the adoption of Chinese patents abroad is limited.

A powerful technology for both civil and military applicatio­ns, AI will change internatio­nal commercial and military landscapes in the future. This is why the U.S. has been alert to AI developmen­t in China. While trying to maintain its edge in this field, it has

AI will change internatio­nal commercial and military landscapes in the future.

adopted a slew of blockade and containmen­t measures against China.

For instance, the U.S. government has directly interfered in the market by targeting leading Chinese AI companies. In October 2019 the Bureau of Industry and Security (BIS) of the Department of Commerce added eight leading Chinese AI companies to the Entity List ( for allegedly “engaging in or enabling activities contrary to the foreign policy interests of the United States). Among them are IFLYTEK and Megvii. Meanwhile the U.S. is making laws to tighten export of emerging technologi­es. In November 2018 the BIS published an advance notice of proposed rulemaking (ANPRM) seeking public comment on criteria for identifyin­g “emerging technologi­es” that are essential to U.S. national security with an aim to impose export controls on such technologi­es. One of the 14 categories listed by the ANPRM as emerging technologi­es that are important to U.S. national security is AI and machine learning.

In the coming years, the U.S. may, in violation of the principle of fair competitio­n, employ more measures to check China’s AI developmen­t. AI research is however an open, sharing process, it is impossible for the U.S. government to prohibit American companies and universiti­es to publish their research results. So all it can do is to control the export of Ai-related cloud computing and chip technologi­es and put into place a control mechanism that restricts other countries’ access to its latest research results. These measures will undoubtedl­y inhibit advances in AI technologi­es worldwide, and accelerate fragmentat­ion of technologi­cal standards and the applicatio­n market.

All in all, stronger headwinds are anticipate­d for China-u.s. cooperatio­n in the fields of AI R&D, investment, and industries. The U.S. is also trying to dissuade other developed countries from cooperatin­g with China on AI. If major player countries in this field cannot build mutual trust and consensus on AI research and governance, global AI developmen­t will end up being Balkanized. C

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 ??  ?? The IFLYTEK delegation appears at the Australia-china Trade Expo on July 13, 2019 with its AI products.
The IFLYTEK delegation appears at the Australia-china Trade Expo on July 13, 2019 with its AI products.
 ??  ?? The smart transport section of the Lenovo Future Center opens in Beijing on November 2, 2019.
The smart transport section of the Lenovo Future Center opens in Beijing on November 2, 2019.

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