The Technology Horizons Group is a new initiative by Takshashila to bring together key stakeholders to discuss issues in the technology and public policy sphere. The report, China's Quest for AI Leadership, evaluates the Chinese government’s strategy as it seeks to develop the country into the world’s primary innovation centre for artificial intelligence by 2030.

1. China’s Quest for AI Leadership:
Prospects & Challenges
Technology Horizons Group
Manoj Kewalramani
@theChinaDude
manoj@takshashila.org.in

2. Index
● Strategic Objective
● Devising a Strategy
● AI Definition & Role
● The State Council’s Plan
● Emerging International Competition
● Incentive Matrix
● Four-Pronged Approach
● Major Constraints
● Assessment

3. Strategic Objective
“Innovation is the primary driving force behind
development; it is the strategic underpinning for
building a modernized economy.”
- Xi Jinping, 19th Party Congress.

4. Devising a Strategy
2006
National Medium- and
Long-Term Program for
Science and Technology
Development (2006-
2020)
2016
- Internet Plus and AI Three- Year
Implementation Plan
-13th Five-Year Plans
- Robotics Industry Development
Plan
- Artificial Intelligence 2.0
2017
- A New Generation of Artificial
Intelligence Development Plan
- Three-Year AI Action Plan
2015
Made in China 2025

5. AI Definition & Role
AI Industry
Core AI: Industry-agnostic
developments
AI-related: Applications for
specific industries
Economic
Development
Social
Construction
National Security

6. State Council’s AI Plan Targets
AI core industry > 1 trillion RMB.
AI-related industries > 10 trillion
RMB.
2030
● Major breakthroughs in core technologies & applications
● World-leading AI technology innovation and personnel
training centers along with well-defined legal framework.
● World’s primary innovation center, occupying the
commanding heights of AI technologies
AI core industry > 400 billion
RMB.
AI-related industries > 5 trillion
RMB.
2025
● New-generation AI widely used across sectors
● Initial establishment of laws and regulations to govern AI
development
● Achieve major breakthroughs in basic AI theories. Some
technologies & applications achieve a world-leading level.
AI core industry > 150 billion
RMB.
AI-related industries > 1 trillion
RMB.
2020
● Building a set of world-leading AI backbone enterprises in
China
● Progress in big data, cross-medium, swarm & hybrid enhanced
intelligence along with autonomous intelligence systems.
● China will rank as a leading global innovation nation

7. Scale of China’s AI Industry

8. Emerging International Competition

10. Four-Pronged Approach
Technology & Talent Data Management
Research & RulesCommercial Ecosystem
- Reliance on imports
- Partnerships and M&As
- Focus on core technology R&D
- Training & Gathering of talent
- Focus on AI education
- Enhancing China’s
attractiveness
- Investments in R&D - papers & patents
- Business-gov’t-academia linkages
- Enhanced political control & strengthened
targets
- White Paper on AI standardisation
- Regulations to test new technologies
- Hosting global AI standards meeting
- Quantity and accessibility
- Privacy - state over private sector
- Business models around state needs
- Open data and open systems
- Data localisation - protectionist tool
- Quality, diversity, technology and manpower
- Team of national champions
- Easy capital availability
- Support for entrepreneurship
- Demand-driven focus with state as key customer
- Expressly identified sectors in govt plans
- Concerns over structural market distortion

11. Key Sectors for China’s Top 50 AI Firms
Internet of
Things
Computer
Vision
Healthcare
Robotics
Autonomous
driving
AI chips
Financial
services
Voice
Recognition
Security
services
Education
Data: China Money Network

12. Major Constraints
Command Innovation
Geopolitical Risks
Growth vs Stability
Dilemma

13. Assessment
● Strong govt commitment to AI industry development
● Expect continued expansion in scale of industry
● Focus on entrepreneurship to lead to innovation
● Overcapacity, overinvestment & quality to be key
concerns
● Global competition to limit China’s attractiveness for
talent
● Nationalism, geopolitical factors to hurt int’l collaboration
● Intensifying political control to hinder innovation & yield
suboptimal outcomes

14. Prospects & Challenges
Technology Horizons Group Manoj Kewalramani
@theChinaDude
manoj@takshashila.org.in
China’s Quest for AI Leadership
Thank You.