Artificial intelligence industry in China

Source: Wikipedia, the free encyclopedia.

The artificial intelligence (AI) industry in China is a rapidly developing multi-billion dollar industry. The roots of China's AI development started in the late 1970s following

economic reforms emphasizing science and technology
as the country's primary productive force.

The initial stages of China's AI development were slow and encountered significant challenges due to lack of resources and talent. At the beginning China was behind most Western countries in terms of AI development. A majority of the research was led by scientists who had received higher education abroad.[1]

Since 2006, the Chinese government has steadily developed a national agenda for artificial intelligence development and emerged as one of the leading nations in artificial intelligence research and development.[2] In 2016, the Chinese Communist Party (CCP) released in its thirteenth five-year plan in which it aimed to become a global AI leader by 2030.[3]

The State Council has a list of "national AI teams" including fifteen China-based companies, including Baidu, Tencent, Alibaba, SenseTime, and iFlytek.[citation needed] Each company should lead the development of a designated specialized AI sector in China, such as facial recognition, software/hardware, and speech recognition. China's rapid AI development has significantly impacted Chinese society in many areas, including the socio-economic, military, and political spheres. Agriculture, transportation, accommodation and food services, and manufacturing are the top industries that would be the most impacted by further AI deployment.

However, scholars have warned of potential negative impacts on China's labor market and disproportionate benefits between urban and rural areas, coastal and inland regions, and among different income groups.[citation needed] The private sector, university laboratories, and the military are working collaboratively in many aspects as there are few current existing boundaries.[4] In 2021, China published the Data Security Law of the People's Republic of China, its first national law addressing AI-related ethical concerns. In October 2022, the United States federal government announced a series of export controls and trade restrictions intended to restrict China's access to advanced computer chips for AI applications.[5][6]

In April 2023, the Cyberspace Administration of China (CAC) proposed rules that content produced by artificial intelligence "must reflect the core values of socialism."[7] In October 2023, the Chinese government mandated that generative artificial intelligence-produced content may not "incite subversion of state power or the overthrowing of the socialist system."[8] Microsoft has warned that the Chinese government uses generative artificial intelligence to interfere in foreign elections by spreading disinformation and provoking discussions on divisive political issues.[9][10][11]

History

The research and development of artificial intelligence in China started in the 1980s, with the announcement by Deng Xiaoping of the importance of science and technology for China's economic growth.[3]

Late 1970s to early 2010s

Artificial intelligence research and development did not start until the late 1970s after Deng Xiaoping's economic reforms.[3] While there was a lack of AI-related research between the 1950s and 1960s, some scholars believe this is due to the influence of cybernetics from the Soviet Union despite the Sino-Soviet split during the late 1950s and early 1960s.[12] In the 1980s, a group of Chinese scientists launched AI research led by Qian Xuesen and Wu Wenjun.[12] However, during the time, China's society still had a generally conservative view towards AI.[12] Early AI development in China was difficult so China's government approached these challenges by sending Chinese scholars overseas to study AI and further providing government funds for research projects. The Chinese Association for Artificial Intelligence (CAAI) was founded in September 1981 and was authorized by the Ministry of Civil Affairs.[13] The first chairman of the executive committee was Qin Yuanxun, who received a PhD in philosophy from Harvard University. [citation needed] In 1987, China's first research publication on artificial intelligence was published by Tsinghua University. Beginning in 1993, smart automation and intelligence have been part of China's national technology plan.[12]

Since the 2000s, the Chinese government has further expanded its research and development funds for AI and the number of government-sponsored research projects has dramatically increased.[3] In 2006, China announced a policy priority for the development of artificial intelligence, which was included in the National Medium and Long Term Plan for the Development of Science and Technology (2006–2020), released by the State Council.[2] In the same year, artificial intelligence was also mentioned in the eleventh five-year plan.[14]

In 2011, the Association for the Advancement of Artificial Intelligence (AAAI) established a branch in Beijing, China.[15] At same year, the Wu Wenjun Artificial Intelligence Science and Technology Award was founded in honor of Chinese mathematician Wu Wenjun, and it became the highest award for Chinese achievements in the field of artificial antelligence. The first award ceremony was held on May 14, 2012.[16] In 2013, the International Joint Conferences on Artificial Intelligence (IJCAI) was held in Beijing, marking the first time the conference was held in China. This event coincided with the Chinese government's announcement of the "Chinese Intelligence Year," a significant milestone in China's development of artificial intelligence.[15]

Late 2010s to early 2020s

The State Council of China issued "A Next Generation Artificial Intelligence Development Plan" (State Council Document [2017] No. 35) on 20 July 2017. In the document, the

CCP Central Committee and the State Council urged governing bodies in China to promote the development of artificial intelligence. Specifically, the plan described AI as a strategic technology that has become a "focus of international competition".[17]:2 The document urged significant investment in a number of strategic areas related to AI and called for close cooperation between the state and private sectors. On the occasion of CCP general secretary Xi Jinping's speech at the first plenary meeting of the Central Military-Civil Fusion Development Committee (CMCFDC), scholars from the National Defense University 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.[18] During the Two Sessions 2017,"artificial intelligence plus" was proposed to be elevated to a strategic level.[19] The same year witnessed the emergence of multiple application-level usages in the medical field according to reports.[20] Furthermore, the Chinese Academy of Sciences (CAS) established their AI processor chip research lab in Nanjing, and introduced their first AI specialization chip 'Cambrian'.[citation needed
]

In 2018, the State Council budgeted $2.1 billion for an AI industrial park in

Mentougou district.[21] In order to achieve this the State Council stated the need for massive talent acquisition, theoretical and practical developments, as well as public and private investments.[17] Some of the stated motivations that the State Council gave for pursuing its AI strategy include the potential of artificial intelligence for industrial transformation, better social governance and maintaining social stability.[17] As of the end of 2020, Shanghai's Pudong District had 600 AI companies across foundational, technical, and application layers, with related industries valued at around 91 billion yuan.[22]

In 2019, the application of artificial intelligence expanded to various fields such as quantum physics, geography, and medical research. With the emergence of large language models (LLMs), at the beginning of 2020, Chinese researchers began developing their own LLMs. One such example is the multimodal large model called 'Zidongtaichu.'[23] Several Chinese companies and academic institutions are actively involved in LLM research, including Baidu's Ernie.[citation needed] In March 2023, Huawei released its trillion parameter LLM 'PanGu-Sigma,' as an example in Chinese LLM development.[24]

Chronology of major AI-related policies

Year Policy document Issued by
2015 Made in China 2025 Premier Li Keqiang and his cabinet
2015 "Guiding Opinions of the State Council on Actively Promoting the "Internet Plus" Action" (国务院关于积极推进"互联网+"行动的指导意见) State Council of the People's Republic of China
2016 Thirteenth Five-Year Plan of China (中华人民共和国国民经济和社会发展第十三个五年规划纲要) State Council of the People's Republic of China
2016 "Internet +' AI Three-Year Implementation Plan" (新一代AI产业发展三年行动计划）) National Development and Reform Commission;

Ministry of Science and Technology; Ministry of Industry and Information Technology; the Central Leading Group for Cyberspace Affairs

2017 "New Generation AI Development Plan" (新一代人工智能发展规划) State Council of the People's Republic of China
2019 Guidelines for the Construction of the National New Generation Artificial Intelligence Open Innovation Platform" （国家新一代人工智能开放创新平台建设工作指引） Ministry of Science and Technology
2020 "National New Generation of AI Standardization Guidance" (国家新一代人工智能标准体系建设指南) National Standardization Administration;Central Cyberspace Administration;

National Development and Reform Commission; Ministry of Science and Technology Ministry of Industry and Information Technology

2021 Fourteenth Five-Year Plan of China (中华人民共和国国民经济和社会发展第十四个五年规划纲要) State Council of the People's Republic of China
2021 "A new generation of artificial intelligence ethics code" （新一代人工智能伦理规范） Ministry of Science and Technology
2021 China's Data Security Law (中华人民共和国数据安全法) State Council of the People's Republic of China

Government goals

According to a February 2019 publication by the Center for a New American Security, CCP general secretary Xi Jinping – believes that being at the forefront of AI technology will be critical to the future of global military and economic power competition.[25] By 2025, the State Council aims for China to make fundamental contributions to basic AI theory and to solidify its place as a global leader in AI research. Further, the State Council aims for AI to become "the main driving force for China's industrial upgrading and economic transformation" by this time.[17] By 2030, the State Council aims to have China 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."[17]

According to academics Karen M. Sutter and Zachary Arnold, the Chinese government "seeks to meld state planning and control while some operational flexibility for firms. In this context, China's AI firms are hybrid players. The state guides their activity, funds, and shields them from foreign competition through domestic market protections, creating asymmetric advantages as they expand offshore."[26]

The CCP's fourteenth five-year plan reaffirmed AI as a top research priority and ranks AI first among "frontier industries" that the Chinese government aims to focus on through 2035.[3]

Research and development

Chinese public AI funding mainly focused on advanced and applied research.[27] The government funding also supported multiple AI R&D in the private sector through venture capitals that are backed by the state.[27] Much analytic agency research showed that, while China is massively investing in all aspects of AI development, facial recognition, biotechnology, quantum computing, medical intelligence, and autonomous vehicles are AI sectors with the most attention and funding.[28]

According to national guidance on developing China's high-tech industrial development zones by the Ministry of Science and Technology, there are fourteen cities and one county selected as an experimental development zone.[29] Zhejiang and Guangdong provinces have the most AI innovation in experimental areas. However, the focus of AI R&D varied depending on cities and local industrial development and ecosystem. For instance, Suzhou, a city with a longstanding strong manufacturing industry, heavily focuses on automation and AI infrastructure while Wuhan focuses more on AI implementations and the education sector.[29]

In 2016 and 2017, Chinese teams won the top prize at the Large Scale Visual Recognition Challenge, an international competition for computer vision systems.[30] Many of these systems are now being integrated into China's domestic surveillance network and Social Credit System.[31]

Interdisciplinary collaborations play an essential role in China's AI R&D, including academic-corporate collaboration, public-private collaborations, and international collaborations and projects with corporate-government partnerships are the most common.

WuDao).[33]

Population

China's large population generates a massive amount of accessible data for companies and researchers, which offers a crucial advantage in the race of big data. China has the world's largest number of internet users as of at least 2024, thereby generating huge amounts of data for machine learning and AI applications.[34]: 18 

Facial recognition

Facial recognition is one of the most widely AI applications in China. Collecting these large amounts of data from its residents helps further train and expand AI capabilities. China's market is not only conducive and valuable for corporations to further AI R&D but also offers tremendous economic potential attracting both international and domestic firms to join the AI market. The drastic development of the information and communication technology (ICT) industry and AI chipsets in recent years are two examples of this.[35] China has become the world's largest exporter of facial recognition technology, according to a January 2023 Wired report.[36]

Impact

Economic impact

Most agencies[who?] hold optimistic views about AI's economic impact on China's long-term economic growth. In the past, traditional industries in China have struggled with the increase in labor costs due to the growing aging population in China and the low birth rate. With the deployment of AI, operational costs are expected to reduce while an increase in efficiency generates revenue growth.[37] Some highlight the importance of a clear policy and governmental support in order to overcome adoption barriers including costs and lack of properly trained technical talents and AI awareness.[38] However, there are concerns about China's deepening income inequality and the ever-expanding imbalanced labor market in China. Low- and medium-income workers might be the most negatively impacted by China's AI development because of rising demands for laborers with advanced skills.[38] Furthermore, China's economic growth might be disproportionately divided as a majority of AI-related industrial development is concentrated in coastal regions rather than inland.[38]

Military impact

China seeks to build a "world-class" military by "intelligentization" with a particular focus on the use of unmanned weapons and artificial intelligence.[39] It 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 afterwards showed a computer simulation of a similar swarm formation finding and destroying a missile launcher.[4]:23 Open-source publications indicated that China is also developing a suite of AI tools for cyber operations.[40][4]:27 Chinese development of military AI is largely influenced 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, China aims to use AI for exploiting large troves of intelligence, generating a common operating picture, and accelerating battlefield decision-making.[40][4]:12-14 The Chinese Multi-Domain Precision Warfare (MDPW) is considered China's response to the U.S. Joint All-Domain Command and Control (JADC2) strategy, which seeks to integrate sensors and weapons with AI and a vigorous network.[41][42]

Twelve categories of military applications of AI have been identified: UAVs, USVs, UUVs, UGVs, intelligent munitions, intelligent satellites, ISR (Intelligence, Surveillance and Reconnaissance) software, automated cyber defense software, automated cyberattack software, decision support, software, automated missile launch software, and cognitive electronic warfare software.[43]

China's management of its AI ecosystem contrasts with that of the United States.[4]: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 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 in January 2017.[2][4]:19 In addition, the Chinese government is leveraging both lower barriers to data collection and lower costs of data labeling to create the large databases on which AI systems train.[44] 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.[40][4]: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.[45] Chinese venture capital investment in U.S. AI companies between 2010 and 2017 totaled an estimated $1.3 billion.[46][40] In September 2022, the U.S. Biden administration issued an executive order to prevent foreign investments, “particularly those from competitor or adversarial nations,” from investing in U.S. technology firms, due to U.S. national security concerns.[47][48] The order covers fields of U.S. technologies in which Chinese government has been investing, including “microelectronics, artificial intelligence, biotechnology and biomanufacturing, quantum computing, [and] advanced clean energy.”[47][48]

Academia

Although in 2004, Peking University introduced the first academic course on AI which led other Chinese universities to adopt AI as a discipline, especially since China faces challenges in recruiting and retaining AI engineers and researchers.[21] 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.[38]:8 Although China surpassed the United States in the number of research papers produced from 2011 to 2015, the quality of its published papers, as judged by peer citations, ranked 34th globally.[49] China especially want to address military applications and so the Beijing Institute of Technology, one of China's premier institutes for weapons research, recently established the first children's educational program in military AI in the world.[50][40]

Ethical concerns

For the past years, there are discussions about AI safety and ethical concerns in both private and public sectors. In 2021, China's Ministry of Science and Technology published the first national ethical guideline, 'the New Generation of Artificial Intelligence Ethics Code' on the topic of AI with specific emphasis on user protection, data privacy, and security.[51] This document acknowledges the power of AI and quick technology adaptation by the big corporations for user engagements. The South China Morning Post reported that humans shall remain in full decision-making power and rights to opt-in/-out.[51] Before this, the Beijing Academy of Artificial Intelligence published the Beijing AI principles calling for essential needs in long-term research and planning of AI ethical principles.[52]

Data security has been the most common topic in AI ethical discussion worldwide, and many national governments have established legislation addressing data privacy and security. The Cybersecurity Law of the People's Republic of China was enacted in 2017 aiming to address new challenges raised by AI development.[53][original research?] In 2021, China's new Data Security Law (DSL) was passed by the PRC congress, setting up a regulatory framework classifying all kinds of data collection and storage in China.[54] This means all tech companies in China are required to classify their data into categories listed in Digital Subscriber Line (DSL) and follow specific guidelines on how to govern and handle data transfers to other parties.[54]

Judicial system

In 2019, the city of Hangzhou established a pilot program artificial intelligence-based Internet Court to adjudicate disputes related to ecommerce and internet-related intellectual property claims.[55]: 124  Parties appear before the court via videoconference and AI evaluates the evidence presented and applies relevant legal standards.[55]: 124 

Leading companies

Leading AI-centric companies and start-ups include Baidu, Tencent, Alibaba, SenseTime[56] and Yitu Technology.[56] Chinese AI companies iFlytek, SenseTime, Cloudwalk and DJI have received attention for facial recognition, sound recognition and drone technologies.[57]

At the World Artificial Intelligence Conference 2019 hosted in Shanghai, the Ministry of Science and Technology announced the latest list of Chinese firms that were selected for China's AI "national team" with assigned specialized AI sectors.[citation needed] China has expanded its national AI team three times since its initial announcement in 2017. The number of firms involved has also expanded from five to fifteen:

  • In 2017, Alibaba Cloud (阿里云), Baidu (百度), Tencent (腾讯), iFlytek (科大讯飞) are the initial four firms in China's national AI team
  • In September 2018, SenseTime (商汤) became the fifth member of the team
  • In 2019, ten more companies are added to the list, including Yitu (依图) and Xiaomi (小米)
Year Company Designated AI Specialty
2017 Alibaba Cloud (阿里云) Smart City Brain
2017 Baidu (百度) Autonomous Vehicle
2017 Tencent (腾讯) Medical Intelligence
2017 iFlytek (科大讯飞) Voice Recognition
2018 SenseTime (商汤) Intelligent Vision
2019 Yitu (依图科技) Visual Computing
2019 Minglamp Technology (明略科技) Intelligent Marketing
2019 Huawei (华为) Software and Hardware
2019 Pingan (中国平安) Financial Intelligence
2019 Hikvision (海康威视) Video Perception
2019 JD.com (京东) Smart Supply Chain
2019 Megvii (旷世科技) Visual Perception
2019 Qihoo 360 (奇虎360) Security and Smart Brain
2019 TAL Education Group (好未来) Education
2019 Xiaomi (小米) Home Automation

Assessment

Academic Jinghan Zeng argued China's commitment to global AI leadership and technological competition was driven by its previous underperformance in innovation which was seen as a part of the "century of humiliation" since the Qing dynasty by the central government.[58] According to Zeng, there are historically embedded causes of China's anxiety towards securing an international technological dominance – China missed both industrial revolutions, the one starting in Britain in the mid-18th century, and the one that originated in America in the late-19th century.[58] Therefore, China's government desires to take advantage of the technological revolution in today's world led by digital technology including AI to resume China's "rightful" place and to pursue the national rejuvenation proposed by Xi Jinping.[58]

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 the U.S. AI policy discussions," and recommended that "the U.S. policymaking community to 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."[25] 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."[59]

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.[40]:23

Human rights

The widely used AI facial recognition has raised concerns.[60] According to The New York Times, deployment of AI facial recognition technology in the Xinjiang region to detect Uyghurs is "the first known example of a government intentionally using artificial intelligence for racial profiling,”[61] which is said to be “one of the most striking examples of digital authoritarianism."[62] Researchers have found that in China, areas experiencing higher rates of unrest are associated with increased state acquisition of AI facial recognition technology, especially by local municipal police departments.[63][64]

See also

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  62. ^ Sahin, Kaan (December 18, 2020). "The West, China, and AI surveillance". Atlantic Council. Retrieved February 25, 2024.
  63. ^ "Autocracy and AI Innovation". Stanford University Center on China's Economy and Institutions. Stanford University. July 1, 2022. Retrieved February 25, 2024.
  64. ^ "China's AI-Tocracy Quells Protests and Boosts AI Innovation". IEEE Spectrum. Retrieved 2024-02-26.

Further reading

  • Hannas, William C.; Chang, Huey-Meei, eds. (29 July 2022). Chinese Power and Artificial Intelligence: Perspectives and Challenges (1st ed.). London:
    OCLC 1320821529
    .
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