Artificial Intelligence (AI) technologies are expected to contribute $15.7 trillion to the global economy by 2030, upending every facet of human society from the economy to warfare, along the way. Leadership in AI technologies, therefore, will give any country a qualitative edge over its rivals, both economically and militarily, a thought echoed recently by Vladimir Putin, who said that the nation that leads in AI will become the ruler of the world. Countries across the world have begun recognising this, but no country has seemed more aware of it than China.

The last few years have seen a veritable boom in Chinese AI advances. Chinese companies like Baidu and Tencent now routinely match the likes of Google in AI research output. China now publishes the second highest number of AI-related academic papers, behind only the United States, and two of its universities are amongst the top ten global organisations with the most quoted AI research papers. What is particularly startling about this boom, however, is not the rate at which the Chinese private sector or academia is pushing new AI development, but the role the Chinese state sees itself playing in ensuring that this boom becomes the basis for Chinese power in the near future.

R. Shashank Reddy
R. Shashank Reddy was a research analyst at Carnegie India. His research focuses on the implications of emerging technologies and their governance for international and Indian security.
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On July 20th, 2017, China’s State Council released an official report dedicated to the strategic planning and development of AI. The ‘Next Generation Artificial Intelligence Development Plan’ outlines China’s vision to become the leading global force in AI technologies by 2030. The document envisions AI as being the breakthrough technology of the near future and reveals China’s overarching strategy for AI that involves a temporal framework to support set targets and determine areas of future investments. This plan provides the conceptual policy framework for the massive strides China has been making recently in this field, and understanding this document is central to understanding China's vision of its AI future.

The New Generation Development Plan is not as much a concrete policy proposal as a vision document. Reflecting the style of a number of official Chinese documents, it is long on hyperbole with little articulation of processes and mechanisms underlying its framework. The information it does provide, however, including broad accomplishments, is substantial enough to purport China’s strategic goals over the next decade and a half.

It is, for example, candid about what it sees as current Chinese AI strengths—voice and visual recognition, industrial robotics, biometric identification; and weaknesses—fundamental AI research, core algorithms, key equipment including high-end chips, and high-end software. The document sees China’s relative weakness in the areas listed above vis-à-vis the United States especially, as a roadblock to Chinese economic ascendancy. It underlines a widespread belief within the Chinese establishment that unless it can outmatch the United States in every single area of AI research and applications, China will not be able to claim the mantle of the world’s superpower. The document, therefore, envisions AI to be central to future Chinese growth, and calls for closely integrating AI technologies in all facets of Chinese society, a process it refers to as ‘intelligization’ of Chinese society.

Deepakshi Rawat
Deepakshi Rawat is a research intern at Carnegie India.

The document lays down goals for Chinese AI advances at five-year intervals. First, the plan states that by 2020, China would match global developments in AI to compete in international markets. Then, by 2025, it projects AI to become ‘the main driving force behind China’s industrial upgrading and economic transformation’, with some Chinese AI applications being well ahead of the rest of the world. Finally, in 2030, the document envisages China becoming the world’s primary AI innovation centre, seeing it as ‘laying an important foundation for becoming a leading innovation-style nation and economic power’. Significantly, while the document sees the private sector driving many of these advances, it also envisages vast state support to Chinese companies, startups, universities and research institutions to achieve these goals.

While the New Development Plan contains the overarching vision for China’s AI story, it is one component of a web of initiatives taken up by the Chinese government. There exists, for example, a Made in China 2025 plan, which focuses on encouraging greater use of indigenous industrial robotics and AI in order to dominate high-end manufacturing. ‘Internet+’, an idea outlined by Li Keqiang, the Chinese Premier, in 2015, looks at incorporating big data and information technology in conventional industries like finance and healthcare. The Chinese government has also backed the creation of an industry-wide alliance for AI development, called the China AI Industry Innovation Alliance, which counts as its members global players like Intel along with several leading indigenous Chinese companies.

Looked at comprehensively, these plans and documents outline China’s AI vision with a focus on three core sectors: the economy, national security and social governance.

The ability of AI to enhance China’s economic capacity and continue its growth story, underlines much of its current emphasis on AI. From enabling the upgradation of its existing industrial units to ‘smart factories’, to the creation of entire new sectors of the economy worth $150 billion by 2030, the Chinese state sees AI as vital to the next phase of its economic growth, and thereby to strengthening its claim to be the sole superpower of the coming century. To achieve this, the Chinese state is not only attempting to build an AI conversant talent pool within China, but is also encouraging its companies and universities to acquire foreign talent and resources through strategic investments, institutional collaborations, and straightforward hiring of top AI talent. Such acquisitions have begun making the United States uneasy, which sees such moves as undermining its technological edge, leading to a bipartisan group of lawmakers in the US pushing for greater oversight of Chinese investments in American AI startups and companies. The economy lies at the heart of the Chinese state’s unique social contract with its people-prosperity for obedience. Any deviation from this, especially a sustained slowdown in economic growth, could lead to increasing dissent among its citizenry, and thereby undermine this contract, a prospect that hangs over the Chinese state like the proverbial sword of Damocles. The state, therefore, sees it as a necessity to play an increasingly central role in financing and building the institutional capacity of enterprises and firms to integrate AI across all their operations, to ensure the continuity of China’s economic boom.

AI investments in China are also being driven by national security objectives. Elsa Kania, a scholar with the Center for a New American Security, has pointed out that the Chinese military is considering using AI to enhance battlefield data analysis to aid in strategic decision-making, and is investing heavily in swarm technology and autonomous naval and air force military systems. It is also highly likely that China will deploy AI for cyber-security in both defensive and offensive capabilities. AI is, therefore, seen by the Chinese military as a pivotal technology to its future plans and for it to build a credible edge against the United States. Furthermore, the Chinese state has had no qualms about stating that any breakthroughs in its civilian AI sector can and will be used for the benefit of the military. This nexus between the AI industry and its state is best exemplified by the Chinese search engine giant Baidu heading a state-backed deep-learning research laboratory. The relationship between the Chinese technology giants and the Chinese state is fundamentally different from the relationship between technology companies and the state in the other big AI power, the United States. While several technology companies in the US have benefited from the government’s financial and research largesse, they are also able to categorically deny the government access to their technologies to protect the individual rights of their customers, without much harm to themselves, as evidenced by the dispute between Apple and the FBI over unlocking cell phones. Such a dispute would simply not exist in China, leading to a situation where every potential civilian AI advancement would automatically lead to a similar advancement for the Chinese military.

The final component of China’s plans for AI involves the creation of what the New Development Plan terms as an ‘intelligent society’. A part of this involves using AI to ensure better outcomes in and more effective delivery of healthcare, education and local governance. The flip side of the Chinese idea of an ‘intelligent society’, however, is the use of AI for applications like predictive policing, and the proposed National Social Credit System where every citizen will be given a rating based on government data, which will be used to determine their standing in society and their access to everything from loans to government services. These particular applications would be controversial outside of China, violative as they are of principles such as the right to privacy, and basic tenets of the criminal justice system. However, within China, the government is pressing ahead with them, potentially giving rise to what The Economist has called a ‘Digital Totalitarian State’. The National Social Credit System, for instance, is slated to be rolled out by 2020, with the government having already called for bids from private companies to build this system.

China’s AI plans are vast in their scope, leaving no part of its state or society untouched. These plans, however, will also have significant implications both for the established international order, and for individual countries. For Indian policymakers, there are four key takeaways from China’s AI plans:

First, there can be no doubt about AI’s pivotal role in the future economic growth of any country. The applications of AI will cut across all sectors of the economy, from manufacturing to finance. What is of special import to India is China’s plan to harness AI to boost its manufacturing sector. With rising manufacturing costs in China, and the slow flight of low-end manufacturing from the mainland, a window of opportunity currently exists for India to build its own manufacturing base, a necessity to create jobs that can meet the aspirations of India’s young and growing workforce. However, advances in AI and subsequent use of greater automation could enable China to consolidate its manufacturing sector by increasing efficiency without any additional increase in costs, and effectively close this window before India can take advantage of it. China has already become a global leader in the use of industrial robots, and its companies have begun buying robotic system enterprises across the world. Leadership in both manufacturing hardware and software sectors would not only catapult China to a dominant economic position, but might also stem the migration of low-end manufacturing. To mitigate this, India has to not only capture the manufacturing currently leaving China, but also invest heavily in indigenous industrial robotics and AI-operated systems to take advantage of future manufacturing opportunities.

Second is the need to recognise the growing importance of AI for national security. As has been mentioned above, AI can be used by militaries for faster and better analysis of battlefield data which can aid in significantly faster decision making processes, or can deployed in the form of autonomous weapons systems, which are weapons that can act without human supervision. In effect, therefore, AI could herald an entirely new form of warfare. The Chinese plans expressly recognise this and commit towards greater incorporation of AI in national defence. This specific use of AI has not only piqued the interest of the Chinese state, but also the US military, which has established an Algorithmic Warfare Cross-Function Team, to help better analyse battlefield data and put AI at the heart of its ‘Third Offset Strategy’, which seeks to sustain the American military’s technological edge over its rivals. If India is to maintain a credible military edge in the near future, it must necessarily initiate a discussion on integrating AI in its military. The Indian naval and air forces are best equipped to begin incorporating current advances in the technology, specifically in autonomous platforms, due to the relatively more structured environment they operate in. Drones, UAVs, Unmanned Surface Vehicles, and Unmanned Underwater Vehicles could all act as force multipliers, especially when securing Indian interests in regions like the Indian Ocean. Different branches of the armed forces must begin engaging with the Indian private sector, including startups, to fully leverage the domestic potential of AI for their uses. The United States’ Defence Advanced Research Projects Agency (DARPA) can be used as a model to facilitate state-funding and backing of private companies and start-ups. DARPA has been instrumental in the development of several revolutionary technologies including the internet and autonomous cars. An agency that functions along similar lines in India is necessary in an age where any government has to be nimble-footed to adequately deal with rapid technological changes.

Third, with a growing Chinese technological footprint in India, data protection and individual privacy of Indian citizens needs to be taken seriously. There are growing concerns across the world that Chinese technology companies build backdoors that allow transfer of data to China, a major issue given the close relationship between Chinese technology companies and the Chinese state. The fear is that this data will be made freely available to the Chinese government and thereby to its military. The Indian Government has already recognised this to an extent, with its recent measures against Chinese mobile phone companies. However a more concerted effort is needed to tackle this issue. Data is currently the single most important factor needed for better AI, and it would be unfortunate if Indian data was used to propel Chinese advances, not to mention allowing the Chinese state access to potentially sensitive personal information of Indian citizens. The Indian Government can begin addressing this issue by expressly recognising the Right to Privacy as enunciated by the Supreme Court recently in Puttaswamy vs Union of India, and establishing data-protection guidelines which are to be strictly adhered to by all technology companies in India, whether domestic or foreign. With a new draft data protection law expected to be tabled soon, the time is ripe to incorporate these issues within the framework of any forthcoming legislation.

Finally, policymakers must understand that while India currently lags the United States and China in AI research and applications, it has immense potential to exploit the opportunities provided by developments in AI technologies. With an exponential rise in smart-phone and internet users, as well as the increasing ubiquity of government identification schemes like Aadhaar, and an uptick in digital transactions, there is a vast amount of data that is floating around India. This data, if aggregated and anonymised, is an untapped mine which can be used to power indigenous AI startups and enterprises. Tagging, consolidating and allowing access to this data, with sufficient provisions for privacy and data protection, could provide a substantial boost to Indian AI companies. Further, India’s vast engineering workforce, if properly retrained to be AI conversant, can provide a ready pool of talent to tap into. Given the lack of an indigenous tech behemoth such as Google or Baidu, the imperative falls on the Indian state to provide the necessary push to build a robust indigenous AI ecosystem. It is the Government that holds the most significant amount of data in India, and it is the Government that has the financial resources to fund fundamental research and development in this area.

That AI is going to be a transformative technology in the near future should be taken for granted. China recognises this and is making a gambit to achieve global leadership in AI technologies, so as to cement its own ascendancy. Given the importance of AI in the coming years, India must keep a wary eye on Chinese developments in this field, and develop its own strategic vision of how AI technologies can be harnessed to advance its interests. India has begun taking tentative steps in this direction, with the establishment of an inter-departmental Artificial Intelligence Task Force, which is mandated with making recommendations to make India one of the ‘leaders of AI-rich economies’. However, the nature of these recommendations and the willingness of the Government to act upon them remain to be seen. Unless India makes a determined approach to turn AI’s potential to its advantage, it risks turning the current gap between Chinese and Indian national powers into an unbridgeable chasm.

This article was originally published in Open Magazine.