The Development of Artificial Intelligence in China: Investment and attention to production

Firstly, as the main basis for AI development in the People’s Republic of China, the State has significantly increased its investment in the industry. It pays special attention to long-term financial support for basic research, and strengthens support for the AI industry purposefully and selectively with foundations and benefits.

It was necessary to learn from the experience and lessons relating to the allocation of national scientific research and development funds in the past, to formulate and improve the principles and methods of the rational allocation of funds, as well as take effective and fair measures to solve the problem of the unfair distribution of research funds, and make the best use of the support provided by staff incentives.

Secondly, China has encouraged private capital to invest in the AI industry and entrepreneurship. Inspired by the current booming of the AI sector, much private capital necessarily wants to join the AI industry. Giants and start-ups are collaborating to revitalise the AI market. The Internet companies such as Baidu, Alibaba, and Tencent have already lined up in the AI field and the injection of capital is expected to revitalise the market. According to some surveys, a large number of start-ups are getting involved in the AI field and almost all of them have received investment, with funding far exceeding five billion yuan.

Driven by factors such as national policy support, the demand for applications, technological progress and capital injection, a market window of over one hundred billion is opening. Paying attention to create a good development environment for non-public AI enterprises, providing free and good services in terms of market access, examination and approval, processing and services, etc., as well as mobilising private enterprises’ enthusiasm and accelerating the development of the non-public economy, have been the foundations of this development.

However, due to the characteristics of the AI sector with broad application prospects, high technological content, long payback period and short technology iteration cycle, many investors bluntly stated that they “did not understand when it came to AI technology, meaning that before investing they wanted to better understand what it was all about – beyond the echo effect of the phenomenon – in order to invest capital wisely.

Besides assessing the technological progress and the prospects for commercial application of the AI field or the AI project invested nationally or abroad, there was also the issue of the staff that had to possess certain professional skills, as the financers’ experts had to have a long-term investment vision.

Over the years and considering the successes achieved, many credit and investment institutions are now more concerned with the value of short-term investment – since long-term investment has long brought economic benefits, visibility and authoritativeness abroad – with the hope of generating returns over a three- or five-year period. It has to be said, however, that the projects investing in AI often have a relatively long payback period and further assessment is required to see whether they can generate returns within the expected terms. Investing in AI technology and industries has to be assessed carefully.

While increasing support for IA research and development, the management of funds needed to be strengthened. It was recommended to implement scientific management of the entire process in the project review and implementation process, strengthen peer review, especially the review of funds and the management of the use of funds, eliminate waste and prevent corruption, so that the limited funds could be cut. Technology was thus greatly enhanced.

During the works at the National Committee of the Chinese People’s Political Consultative Conference, as early as 2015 it was recommended to build one of the largest AI development platforms in the world, in view of the need and feasibility of establishing a national AI development plan.

In the era of the Internet networks, big data and cloud computing, it is unimaginable to develop high-tech and large supercomputing data science and fields such as AI without their own general platform. It is necessary for scientific research institutes, companies and even individual manufacturers to bring various innovations to this platform in a fair and equitable manner. AI technology has now substantial applications: voice recognition, image recognition, multilingual translation, machine learning, intelligent planning, smart control or driverless cars, unmanned aerial vehicles and autonomous underwater vehicles, etc. The basic AI technology starts with the mobile robot and a development platform for intelligent robots is the first step for the further development of big data, cloud computing, smart games, general education, logistics systems, services, transport, smart cities and tourism, expert systems, smart grid (in electrical and telecommunications engineering, a smart grid is the combination of an IT network and an electrical distribution network, which enables the electricity grid to be managed smartly in various aspects or functionalities, i.e. by managing it efficiently for the distribution of electricity and for a more rational use of energy, while minimising overloads and variations in the electrical voltage around the nominal value), etc. 

This platform is open to innovation, to the sharing of resources and facilities, and gets strong support from convinced investors.

China already has extremely rich Internet computing and technology resources and, as computing and network resources become ever more plentiful and the cost ever lower, many intellectual functions that could not be simulated by computers are now able to do so. AI is the highest trend of technology in the current world. For the time being, the other great objective – the humans’ journey to Mars – is only at the theoretical-experimental stage. China currently has the ability to build an AI platform with global influence. At the same time, we need to realize that there are still great gaps and difficulties in achieving the sharing of resources on national and even global issues such as data storage, and this should not be taken lightly.

AI products have both hardware and software, with software as the core technology. In the past there were not many AI products in China – both hardware and software, with software as the core technology – and, without a national standard, the impact was minimal. With the fast rise of the AI industry, new products increased exponentially. Such AI acquisitions will certainly be confused and will inevitably mix with a number of fake and lower-quality products, thus disrupting the market. With a view to ensuring the healthy development of the AI sector and protect the consumers’ legitimate rights and interests, government legislation, as well as quality inspection and market management departments, take precautions and seize the opportunity to formulate or revise standards, through rigorous inspections and staff audits, in order to carefully prevent the entry of unskilled labour.

Only by letting qualified AI products enter the market can the AI high-tech reputation be maintained, which enables the AI industry to create a healthy development and thus promote the industry so that it can truly become the core technology of smart production: a new lever for the transformation and enhancement of the national economic structure, i.e. the engine of a new industrial revolution. (12. continued)

Giancarlo Elia Valori
Giancarlo Elia Valori
Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is a world-renowned Italian economist and international relations expert, who serves as the President of International Studies and Geopolitics Foundation, International World Group, Global Strategic Business In 1995, the Hebrew University of Jerusalem dedicated the Giancarlo Elia Valori chair of Peace and Regional Cooperation. Prof. Valori also holds chairs for Peace Studies at Yeshiva University in New York and at Peking University in China. Among his many honors from countries and institutions around the world, Prof. Valori is an Honorable of the Academy of Science at the Institute of France, Knight Grand Cross, Knight of Labor of the Italian Republic, Honorary Professor at the Peking University