BOFIT Viikkokatsaus / BOFIT Weekly 2017/33

China's State Council last month released an ambitious national development guideline on pushing the frontiers of artificial intelligence (AI). The development of AI technologies is to be promoted through legislative policy, including tax breaks. The State Council has also encouraged Chinese firms to gain AI expertise from abroad through mergers or acquisition. AI refers to machines and devices (e.g. smart cars and robots), as well as software that mimic human reasoning.

The AI directive has a three-step goal. First, make China a global player in AI by 2020 by reaching the level of leading countries in AI technologies and their utilization. Second, become a world leader in AI by 2025. Finally, make China the global centre of AI innovation by 2030.

AI offers the Chinese economy remarkable economic opportunities. For example, the McKinsey Global Institute notes that about half of jobs now performed in China could be fully automated. McKinsey and others point out that AI could significantly boost Chinese economic growth. So, China's political leaders want to make AI the new engine of economic growth.

Artificial intelligence has applications outside manufacturing and commerce that crosses many disciplines from psychology and medicine to military technology and social control. Global interest has recently been piqued by the Chinese planners' intension to construct an Orwellian-sounding "social credit system," whereby every citizen would be scored for social reliability based on his or her online and other behaviour.

China's recently tightened censorship rules are directly at odds with the freedom demanded by an innovation economy. For example, president Xi Jinping's calls for tighter ideological controls at universities are unlikely to promote free thought or effective use of research time. In practice, the push for ideological purity limits the access of Chinese researchers to studies in related fields by their colleagues abroad. In recent weeks, China has initiated a crackdown on virtual private networks (VPNs) that are used to circumvent online censorship. Apple recently had to pull over 60 VPN apps from its Chinese App Store. Media reports also claim Amazon has been pressured to remove VPN apps from its Chinese cloud servers.