China’s strategy on Artificial Intelligence – domestic and international consequences

China’s strategy on Artificial Intelligence – domestic and international consequences
By Marta Ziosico

The Chinese State Council’s targets for the growth of China’s Artificial Intelligence confirms their high expectations for its development. Conceptually, what emerges is:

  1. Catching up to the most advanced Artificial Intelligence powers
  2. Becoming the world leader in Artificial Intelligence and finally,
  3. Leading Artificial Intelligence innovation.

This ‘leap-forward’ poses great challenges at domestic level, for China itself, as well as at international level, for any other country. An analysis that tackles challenges at both levels can aid the understanding of the impact of China’s national strategy in the context of Artificial Intelligence mega-trends.

Domestically, a McKinsey Global Institute study published earlier this year estimated that half of all work activities in China could be automated, making it the nation with the world’s largest automation potential. On the negative side, hundreds of millions of Chinese workers could be affected. AI will raise the premium placed on digital skills while reducing demand for medium- and low-skill workers, potentially exacerbating income inequality. On the plus side, AI’s effect on productivity could be crucial to China’s future economic growth as the population ages. According to a McKinsey Global Institute report, AI-led automation can give the Chinese economy a productivity injection that would add 0.8 to 1.4percentage points to GDP growth annually, depending on the speed of adoption.

Internationally, China is still behind the United States. China may define “winning” differently than the U.S. However, according to the AI Potential Index (AIPI), China’s Artificial Intelligence capabilities are about half of those of America. Nevertheless, given China’s competitive approach, military applications of AI could provide a decisive strategic advantage in international security. The degree to which China’s approach to military AI represents a revolution in military affairs is an important question to study. The level of civil-military integration will be a critical factor in keeping track of this question.

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The Chinese State Council’s targets for the growth of China’s Artificial Intelligence confirms their high expectations for its development. Marta Ziosico discusses the implications of China’s Artificial Intelligence strategy domestically as well as internationally.