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China bets big on artificial intelligence

CSG Smart Science & Technology Co. climbed as much as 9.3%

Bloomberg 

A file photo of Baidu's robot, Xiaodu, at the 2015 Baidu World Conference in Beijing, China. PwC found that China stands to gain more than any other country from AI because of the high proportion of output derived from manufacturing. Reuters
A file photo of Baidu’s robot, Xiaodu, at the 2015 Baidu World Conference in Beijing, China. PwC found that China stands to gain more than any other country from AI because of the high proportion of output derived from manufacturing. Reuters

aims to make the artificial intelligence industry a “new, important” driver of economic expansion by 2020, according to a development plan issued by the State Council.

Policy makers want to be global leaders, with the AI industry generating more than 400 billion yuan ($59 billion) of output per year by 2025, according to an announcement from the cabinet late Thursday. Key development areas include AI software and hardware, intelligent robotics and vehicles, virtual reality and augmented reality, it said.

“Artificial intelligence has become the new focus of international competition,” the report said. “We must take the initiative to firmly grasp the next stage of AI development to create a new competitive advantage, open the development of new industries and improve the protection of national security.”

The plan highlights China’s ambition to become a world power backed by its business giants, research centres and military, which are investing heavily in AI. Globally, the will contribute as much as $15.7 trillion to output by 2030, according to a report last month. That’s more than the current combined output of and India.

Economic ripples

“The positive economic ripples could be pretty substantial,” said Kevin Lau, a senior economist at Standard Chartered Bank in Hong Kong. “The simple fact that is embracing AI and having explicit targets for its development over the next decade is certainly positive for the continued upgrading of the manufacturing sector and overall economic transformation.”

Chinese AI-related stocks advanced Friday. Co. climbed as much as 9.3 per cent in Shenzhen before closing 3.1 per cent higher, while intelligent management software developer Mesnac Co. surged 9.8 per cent after hitting the 10 per cent daily limit in earlier trading.

AI will have a significant influence on society and the international community, according to an opinion piece by East University of Political Science and Law professor published Wednesday in the People’s Daily, the flagship newspaper of the Communist Party.

found that the world’s second-biggest economy stands to gain more than any other from AI because of the high proportion of output derived from manufacturing.

Another report from last month estimated that AI could increase China’s annual growth rate by 1.6 percentage point to 7.9 per cent by 2035 in terms of gross value added, a close proxy for GDP, adding more than $7 trillion.

Military, civilian initiatives

The State Council directive also called for China’s businesses, universities and armed forces to work more closely in developing the

“We will further implement the strategy of integrating military and civilian developments,” it said. “Scientific research institutes, universities, enterprises and military units should communicate and coordinate.”

More AI professionals and scientists should be trained, the State Council said. It also called for promoting interdisciplinary research to connect AI with other subjects such as cognitive science, psychology, mathematics and economics.

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