These days it’s difficult to read about artificial intelligence (AI) without a mention of how China plans to dominate the AI industry worldwide and how it’s going to relegate the U.S. to a distant second position.
While it’s not safe to make predictions about whether China will be successful in pushing the U.S. to second position in the AI industry in the coming years, one can easily say China is putting its best chip forward when it comes to AI.
China’s Ministry of Industry and Information Technology (MIIT) came out with a very detailed document in 2017 that outlined China’s AI ambitions.
The document is essentially an action plan divided into five stages and targets seven focus areas like medical imaging, service robots, language processing, connected vehicles and so on.
The U.S., China and EU in the AI game
Today, the entire AI landscape is very curiously poised between these three powerful entities, and naturally each has its own strengths.
For instance, the EU has been publishing more research papers in AI than the other two since 2000. The U.S., on its part, seems to have the most powerful and talent-rich startup ecosystem that isn’t showing any signs of slowing down. And China has arguably the strongest government push in terms of intent, support and ambitions.
The multi-dimensional debate as to which of the three will beat the other two isn’t easy to tackle, but we can at least view one region at a time.
In this post, we’ll look at what factors favor China and what could go against it as far as its AI dreams are concerned.
Factors favoring China’s AI ambitions
Here are the top six factors that count in China’s favor:
1. China’s political structure
China’s centralized planning ensures resources are focused on wherever it wants. Its unique, authoritative government has the power to overcome any form of internal resistance and speed up decision-making at all levels.
2. Relative autonomy to provinces and regions
The plans aren’t like “One China One Plan.” Each province in China gets a lot of freedom in what area of AI it wants to excel.
For instance, the Xinjiang province may work on medical imaging, the Gansu province may choose to work on language processing, the Hunan province may decide drones will work best for them and so on.
Because of this level of autonomy, China is better placed to make its artificial intelligence dominance multi-pronged and all-encompassing.
3. Huge money
China is pumping a huge, huge amount of money into artificial intelligence technology. The Chinese government is not only investing directly, but is also offering a variety of incentives for the private sector to keep building AI.
Against the investments, China expects everything AI to be Made in China. By 2030, it expects to build a $150 billion domestic AI industry.
4. Internet penetration impressive
China has done quite well when it comes to the reach of internet. As of 2017, 54.3% of its population was covered by the internet, which is truly impressive considering it’s the most populated country in the world.
Put differently, the number of China’s internet users roughly equals 103% of the total population of Europe, 132% of the total population of North America or 181% of total population of South America.
5. Covering many bases
China’s artificial intelligence development plan has thought out many things. For instance, it seeks to ensure that the AI technology developed is safe and reliable. It also proposes to counterbalance the risk of job-losses.
Moreover, it wants to push AI education from schools. In May 2018, China came up with AI textbooks for high-school students, indicating it wants to build talent right from school.
6. Social goods delivery
The plan looks at artificial intelligence as a vehicle with which to deliver social goods and better governance; actually the social credit system of China is largely powered by AI.
With social goods delivery in the offing, China gets a kind of tacit buy-in from people at lower levels too (junior officials as well as citizens). Though China’s political structure doesn’t need citizen’s support, a strong approval for projects considerably reduces potential dissidence, no matter how mild. That’s good politics, good PR for international watchdogs and that much less resource wastage fighting opposing views.
Challenges that China’s AI ambitions must overcome
Does all this mean China’s AI plan is infallible?
Here are six factors that pose serious challenges to China’s AI ambitions.
1. Major skills lie outside the government
China has met with considerable success with a number of plans in the past. Even the recent Made In China (MIC) 2025 seems to have taken off alright.
With AI, things are very different.
The MIC was largely driven by investments and initiatives from the government; artificial intelligence is largely in the hands of the private sector, and is likely to remain that way.
2. The unpredictability of AI
As a technology, AI is constantly evolving and you can’t really plan it with the kind of precision that you have in manufacturing.
The Chinese government has rich experience in planning for sectors that have had a long past and a well-charted future.
Artificial intelligence has neither of the two.
As a matter of fact, AI isn’t one single technology — it’s more like an enabling, empowering technology with which you could drive change in hundreds of things. This very wide canvas makes any plan hazy after a stage.
3. Talent scarcity
Even the most fervently nationalist Chinese officials can’t deny that top AI talent mostly lies outside of China. University professors and government employees in China aren’t quite up to it. Therefore talent from offshore private sector could be calling the shots.
Simultaneously, China could try resorting to multiple variants of talent poaching from Europe or the U.S. This might lead to reactions in forms of regulations and tariffs.
4. Lack of financial discipline
In the past few years,China has been coming out quite strongly against corruption. But given the vague nature of artificial intelligence, one cannot deny the possibility of some financial irregularities during every stage of the AI action plan. Further, officials from both the government as well as the private sector might resort to dubious practices while dealing with overseas companies and their personnel.
5. Fundamental research a weak link
The power of AI needs no proof. In many cases, it’s just a matter of time before benefits start trickling in. However, China’s plans point towards fundamental research in AI — something that China is not very clear about.
Additional funding may not bring in the originally desired dominance without fundamental research in artificial intelligence. Also, the culture that encourages research isn’t easy to build.
6. No track record
To be honest, China doesn’t really have much of a track record when it comes to AI. The institutional environment seems starkly inadequate in closing this gap. Also, there are no visible clues of building super-performing hardware (read silicon chips) that could drive AI. With that background, AI 2.0 doesn’t seem easily achievable for China.
No, with such exciting times ahead for artificial intelligence, there cannot be a final word so soon. While China tries to take hold of AI’s growth, Europe, the U.S. and other industrialized countries cannot be expected to sit on their hands and let China pull ahead.
That the world’s most populated country is trying to dominate an industry that could cause some serious level of unemployment is both perplexing and telling. And if nothing else, China’s announcements regarding its AI designs has certainly shaken up the artificial intelligence industry worldwide.
How the technology unfolds and what sort of ethical questions it raises waits to be seen. But it’s sure going to be a bumpy ride.