China's Next Generation AI Plan
China's AI national strategy is the most comprehensive and detailed in the world, with clear objectives and specific implementation deadlines. For China, the new AI paradigm is a historic window of opportunity that it must take advantage of in order to achieve leadership in AI development in the world. For this reason, it is betting that the benefits of a technological catch-up will allow it to develop economically as a result of promoting its competitiveness, which necessarily implies, in its view, social and national security improvements.
The Chinese plan is based on an important advantage, the abundance of three key resources for the development of AI: a large availability of data from a population of more than 1.4 billion people, a large processing capacity, and numerous engineers. This makes it the only country capable of competing with the US's international leadership in AI, but to achieve this, it is not governed by the same premises as its competitor. Added to this is a private sector with its own dynamics, independent of the North American ecosystem, where companies such as Meituan, founded by Wang Xing, the search engine Sohu by Charles Zhang, and Baidu, co-founded by Robin Li, stand out, as well as the e-commerce giant Alibaba, led by Jack Ma.
China uses public investment as a driver of private investment and leverages its AI strategy to define governance and monitor the progress of defined goals. The US leads by far the top spot in private investment in AI with some 23.6 billion in 2020, and China follows at a distance with 9.9 billion dollars. However, when we look at public investment, we find that the Chinese central and local governments play a key role with public spending likely around $27 billion, compared to $8.3 billion in the US. This state push also makes China the government with the most scientific publications related to AI, accounting for 15.6% of the world total.
Comprehensive planning of Chinese investment is carried out through tax incentives for the development of AI in small and medium-sized companies, the coordination of national AI companies with national and international scientific research schools and institutes, and the channeling of financing through large investment funds such as The Grand Fund, intended for the integrated circuit industry. The government hopes that companies will go out and link up with foreign companies by providing services, making mergers, acquisitions, sharing investments, and even founding research centers abroad. This has made the close ties between China's private sector technology giants and government agencies questionable, given that subsidies would distort international competition. This is a questionable point, given that at the international level it is observed that a large part of the companies working on disruptive technologies have been promoted with state subsidies (Mazzucato, 2013 and Rosales, 2022). But as we can see, the closeness of Chinese intelligence agencies to companies such as Huawei has been questioned, without considering that governments such as those of the US also exercise close supervision of their large technology companies through agencies linked to security and defense.
China's plan does not live in a vacuum, but within the framework of the Made in China 2025 plan, which aims to turn the Asian giant into a global technological power by 2049, the centenary of the founding of the People's Republic of China. This means that technological infrastructure projects are governed by this plan, and its priority sectors, as well as by the Belt and Road initiatives, which are of vital importance for China's expansion. The Government is emphasizing three key technologies: space-oriented network infrastructure, positioning and navigation, big data infrastructure, and high-performance computing infrastructure, aimed at strengthening supercomputing, and cloud computing. To achieve this, it considers it key to optimize the network infrastructure, research and develop the design of fifth-generation mobile communication systems (5G), where Huawei's global success seems destined to lead to hegemony in the coming years.
The promotion of open source is one of the particularities of the Chinese strategy that is not found in others. The Government hopes that the free promotion of the exchange of knowledge between production, research and innovation will help a bidirectional application of scientific, military and civil achievements. Although, its implementation has become a matter of dispute over the possibility of government censorship based on manual code review by public storage company Gitee.
China is not planning to work on iterations of the current generation of AI technologies, but rather is working on the next generation of AI, in order to take advantage of the next competitive advantage that opens a new technological frontier. For this reason, it is betting on research into the basic theory that will allow it to open a new paradigm in AI, strongly focused on working on machine learning, the theory of computation and quantum computing. However, the oil of AI, the data, continues to be obtained from the private activity of citizens from pilot programs in alliance with private companies, which raises fears of the existence of blacklists of citizens, the result of their private behavior. Here, regulation would play a key role, because if it is understood as an obstacle to technological development, its application could be delayed in order to quickly reap its benefits. Or, on the contrary, it would be necessary to see if the demand for an ethical science that leaves aside economic benefits, in order to protect people's privacy, prevails.
In terms of education, China works like other countries in the development of talents to work in AI, which implies strengthening the training of professional and technical resources for basic research, applied research, operations and maintenance of AI. The particularity is that it not only advocates promoting STEM, but also bets on the interdisciplinary training of talents who can understand the theory, methods, technology, products and application of AI, but also the economy, society, management, standards and law. This composite professional training, which they call the AI + X model, is a commitment to complement the training of its students, with its R&D strategy that focuses on interdisciplinary research and the search for convergences between AI, neuroscience, cognitive psychology, mathematics, economics and sociology, in order to generate original discoveries that open the new technological paradigm of AI. This could be seen as an attempt to recreate the virtuous relationship in science and technology that exists between the US military-industrial complex and public universities and institutes, which have yielded technologies such as the Internet.
Finally, on the future of work, it emphasizes accelerating actions that articulate the man-machine relationship, fostering the AI industry, its adoption by other areas of industry, cross-sectoral and trade convergence. This involves, first, substantially increasing the professional skills of workers to meet China's AI development requirements to generate high-quality jobs. Second, encouraging companies and organizations to provide AI skills training for employees. And finally, strengthening the training and guidance of workers for job reintegration, to ensure the smooth automation of simple and repetitive jobs. This means that, as in the US plan, there is no special mention of care tasks and tasks that require a strong human imprint as a field that can be exempted from automation, but rather the coexistence of humans and machines is sought in all possible fields. In this sense, the plan already highlights manufacturing, agriculture, logistics, finance, trade, and domestic use as priority sectors for the application of AI.
The rivalry between the US and China can be seen as a race, a fight, or a competition for world leadership in AI technologies. But it is not so much about who gets there first or who achieves more, given that in such a volatile scenario, any advantage seems to be relative and temporary. However, the volume of investment and resources allocated by these powers to strengthening their AI and machine learning clusters through the acquisition of cutting-edge technological equipment and qualified professionals generates an ordering effect on the rest of the world. Countries with fewer resources for AI development, such as Great Britain, Germany and Japan, are disadvantaged and seriously limited when it comes to forming competitive AI ecosystems. Without a doubt, this “winner takes all” dynamic leaves developing countries far behind due to the enormous gap in economic, human and technological resources that separates them from the two great powers in conflict, the US and China.
-Rosales, Osvaldo (2022): The Chinese Dream, 1st ed.- Autonomous City of Buenos Aires: Siglo XXI Editores Argentina; Santiago de Chile: Economic Commission for Latin America and the Caribbean.
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