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Closing gap with Silicon Valley: China invests heavily in AI; hiring booms

In a war to emerge as a super power in technology, inequality in wages of non-tech jobs continue to lag

Reuters  |  Beijing 

FILE PHOTO: Visitors stand around a ROBOTLEO robot at the Global Mobile Internet Conference (GMIC) 2017 in Beijing
File photo of visitors stand around a ROBOTLEO robot at the Global Mobile Internet Conference (GMIC) 2017 in Beijing. Photo: Reuters

Beijing: Tens of thousands of people are being hired to shore up cybersecurity, help censor online content, and try to make No.1 in the application of (AI), as capital pours into both start-ups and more mature businesses at a time when the government is demanding rapid development.

"Companies are well-funded and are in serious competition for talent," said Thomas Liang, a former at Chinese search giant who is now running an AI-focussed fund. He said that startups in hot sectors like AI often have to offer 50-100 percent pay raises to attract employees away from established firms.

China's emergence as a global centre for technology, with champions such as and now worth more than a trillion dollars combined, has led to a hiring boom and wage growth that starts to puts salaries for the top talent within striking distance of those offered in Silicon Valley.

And while that should please the Chinese government as it seeks to create higher-paying jobs and move up the value-chain, it could also add to income inequality in as wages in non-tech jobs lag, and as the sector's recruitment and income gains tend to be concentrated in the biggest cities such as Beijing and

is certainly a of growth in Output in China's and software sector expanded by 33.8 percent year-on-year in the fourth quarter, compared with 29 percent growth in the third quarter, according to data from the statistics bureau.

In China, top graduates working on AI can command salaries of 300,000 yuan ($47,066) to 600,000 yuan ($94,132) a year, according to tech recruitment website, while team leaders with three-to-five years of experience can make more than 1.5 million yuan ($235,331) annually. Many of these jobs are in Beijing or

Liang estimates salaries in the industry have roughly doubled since 2014. By comparison, an in makes an average of $112,659 a year, and a engineer in the same city an average $150,815, according to job

For Chinese who have studied in the U.S. but now worry about the impact of U.S. Donald Trump's immigration policies on their chances of retaining visas, returning home is becoming more appealing. Chinese tech firms say they actively recruit Chinese students from U.S. colleges, and many have opened offices in Silicon Valley to attract top talent.

The boom in AI work is prompting some engineers to retrain in

"I doubled my salary by making the AI jump," said Song, a 26-year-old AI-engineer in Beijing who now makes around $55,000 per year after taking AI training courses in his own time.

And as a 26-year-old for Beijing Bytedance Co, maker of aggregator app Toutiao, George is pulling down an annual salary of around $60,000 but says he may jump ship if something better comes along.

Both and George asked that their full names not be used. The money is still pouring in. More than $65 billion of were made in Greater last year, up 35 percent from a year earlier, according to research firm Preqin, an all-time high and second only to North America, with $77 billion.

Chinese said at the held last year that will push for the integration of the internet, big data and AI with the traditional economy. This is all part of a government drive to move the Chinese economy up the with a particular emphasis on areas such as information technology, robotics and

The government is also behind a massive push to use and other technologies to track people on a national scale - the authorities say that it will improve security and reduce crime, while human rights advocates claim it is part of a giant surveillance state and will be used against activists and dissidents.

Among the fastest-growing tech companies is Beijing-based AI startup It plans to expand headcount by almost 40 percent this year from its current 400 staffers, human resources director told The tech boom has spilt over to inland cities with setting up a regional headquarters in in the northwest. American tech giants like Apple and have invested heavily in province in the southwest.

Salaries soaring

The hiring and wage rises are starting to show up in the wider economy. After stagnating for several years, disposable income growth in accelerated to 7.3 percent last year, according to official data published last week.

But the gains are much greater for those in the country's burgeoning tech hubs - Beijing, Shenzhen, and - where the disparity with average salaries mirrors trends seen in

But it's not all roses in China's labour market as high-paying tech jobs are only available to a tiny slice of the overall workforce, and even official surveys show declining employment in both the and services industries.

The high salaries in the tech industry far outpace typical income levels in China, where average per capita disposable income was just 25,974 yuan ($4,058.44) last year, China's statistics bureau said last week. "Don't forget that in 2018, (China) is going to have 8.2 million fresh university graduates. Those guys need a job. So from my point of view the pressure to create enough jobs is still there," said Qu Hongbin, Greater at in Hong Kong.

First Published: Thu, January 25 2018. 16:26 IST