How China is Investing in AI to Become the “Country of Innovators”

28/08/2019

China’s total spending on R&D is rising while Chinese tech companies have been ramping up investment in developing core technologies. The Dragon bets it all on AI to become the next “country of innovators”

 

If someone still thinks that artificial intelligence (AI) is something related to the distant future, he could not be more wrong. AI is happening and it belongs to the lives and homes of everyone. But who is bringing AI to life? Once again, the People’s Republic places itself at the forefront of innovation.

While China keeps pursuing the dream to become the world’s leading economy, it is also focusing on strengthening scientific research capacity to catch up with the US to be a “country of innovators,” said Wang Zhigang, head of China’s Ministry of Science and Technology during the Two Session meetings in Beijing last March.

When the Chinese government published its New Generation Artificial Intelligence Development Plan two years ago, challenging its business leaders to achieve preeminence in the field of AI within the next decade, the results were quick to follow. Indeed. today, according to data from the Boston Consulting Group, a remarkable 85% of Chinese companies are active players in the field of AI, adopting AI into the existing processes but also running pilot initiatives.

Their efforts and Beijing’s investments in the field is what is driving the Asian country towards the accomplishment of the “country’s of innovators” dream.

 

how china is investing in ai - beijing - cifnews

© Unsplash. Beijing. Since 2015, Chinese industries dedicated to the development of AI reached the number of 4040 AI companies in 2018, whose 26% is located in Beijing.

 

The history of AI in the Middle Kingdom started in 2016 when the Chinese government made the first commitment in its Three-Year Guidance for Internet Plus Artificial Intelligence Plan, which focused on funding and development of AI for the improvement of the country’s economy. But the focus on AI actually fits in the 13th Five-Year Plan and the Made in China 2025 industry plan that aim to free China from dependence on foreign technologies.

Then, in 2017, the New Generation Artificial Intelligence Development Plan released by The State Council of China details the country’s strategy to build a $150 billion national AI industry in the near future, on its way to becoming the leading AI superpower by 2030.

 

China’s push for efforts in the AI field comes first and foremost from President Xi Jinping’s leadership. The Dragon’s leader “believes that being at the forefront of artificial intelligence technologies is crucial for the future of global, military, and economic competition.”

 

AI is depicted as a national priority even in the 2018 Three-Year Action Plan for Promoting Development of a New Generation Artificial Intelligence Industry, which outlines major areas to focus on in order to enhance AI development and proliferation.

To pursue this goal, the country’s total spending on research and development (R&D) rose 11.6% year-on-year to around $293 billion in 2018. According to the National Bureau of Statistics, 5% of last year’s spending on R&D represented investment toward fundamental research, still well below the developed countries’ average, which is 15% to 20%.

 

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© Pexels. In July, Alibaba’s subsidiary Pingtouge launched its own processor, a particular core technology crucial for China to lead innovation in AI.

 

However, for what concerns Chinese tech companies, they have been boosting investment in developing core technologies. In 2017, Alibaba launched a global research program called Alibaba Academy for Discovery, Adventure, Momentum, and Outlook (DAMO Academy), whose R&D investment exceeded $15 billion over three years.

The e-commerce giant also formed a chip subsidiary specialized in semiconductors in September 2018, Pingtouge, which released the new processor last July, thus starting the migration towards Chinese technological self-sufficiency in the semiconductor field. According to a press release, the processor named XuanTie 910 can be used in applications for sectors including 5G, AI, Internet of Thing, and autonomous driving.

But Alibaba is not new to investments in advanced technologies. In particular, as China’s largest R&D spender, the e-commerce company has invested in seven research labs that focus on artificial intelligence, machine learning, network security, natural language processing, and more.

 

Beijing has asked the country’s four large AI-oriented firms – Baidu, Tencent, Alibaba, and iFlytek – to develop smart hardware and software systems. China thus continues to pour money into artificial intelligence, both through government funding and private investment.

 

A recent study from PwC shows that corporate research spending for publicly listed companies in China grew 34% in 2018 compared with a year earlier. Chinese spending growth eclipses that of all other regions, including US companies, whose spending is reported to increase 8% year-on-year. But although US companies’ total investment value is still the highest, the number of Chinese businesses investing in R&D grew by 16%. Among them, the companies that invested the most in 2018 were Alibaba, Tencent, and ZTE, with $3.6 billion, $2.7 billion, and $2 billion spent respectively.

However, the New Generation Artificial Intelligence Development Plan not only outlines the country’s strategy to build a domestic AI industry worth nearly $150 billion but it also implements the road to the robotics supremacy. According to the Chinese leadership, robotics will be a key cog in Made in China 2025 strategy.

The project divides goals into three phases. By 2020, the plan aims to bring Chinese AI up to global standards thanks to important achievements and innovations in the robotics sector. Then, by 2025, it aims to start establishing laws and regulations in the field while implementing intelligent manufacturing, agriculture, urban planning, and medicine. Finally, the last phase will bring AI to be deeply involved in daily life and China to become the world’s leading AI developer by 2030.

 

how china is investing in ai - robotics - cifnews

© China News. Last week, Beijing hosted the 2019 World Robot Conference showcasing both China’s dominance in the robotics field and the industry’s diverse applications for bots.

 

To showcase the world’s – but mostly China’s – advancements in the robotics sector, last week, Beijing hosted the 2019 World Robot Conference themed “Creating Intelligent Momentum for a New Era of Openness and Shared Benefits.” In the exhibition area covering 52,000 square meters, various kinds of robots, including industrial robots, service robots, special-purpose robots, and intelligent logistic robots, were displayed.

 

Since the first edition in 2015, the World Robot Conference has evolved into an annual idea exchange and a global trendsetter in robotic policy making, technical research, product development, market expansion, industry-finance integration, and talent fostering, becoming the largest-scale, highest-level, and most-internationalized robotics conference in China.

 

According to the report on Chinese Robotic Industry Development 2019 published at the conference, the Chinese robot market has achieved a scale of $4.25 billion in the first half of the year and it is expected to achieve $8.68 billion in 2019 with a $5.73-billion scale of industrial robot, $2.2 billion of service robots and $750 million of robots for special purposes.

Indeed, a report released by the International Data Corporation revealed that Chinese spending on robots and related services is expected to increase rapidly by 2022, with an annual growth of 27%. In 2022, the figure expected will be that of $80 billion with its market size over 38% of the total.

By 2030, China seeks to become “the world’s primary AI innovation center,” with a core AI and AI-related gross outputs exceeding $150.8 billion and $1.5 trillion, respectively. And the cooperation between the Chinese government, the private sector, investors, and academia is what will make the Dragon achieve this goal.

This cooperation encourages multiple players to work towards the same goal so much so that the definition “country of innovators” perfectly fits China’s stimulating situation in the AI field.

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