This testimony assesses the current capabilities of China and the U.S. in AI, highlights key elements of China’s AI policies, describes China’s industrial ecosystem in AI, and concludes with a few policy recommendations.

China’s AI Capabilities

 This section compares the current AI capabilities of China and the U.S. by slicing up the fuzzy concept of “national AI capabilities” into three cross-sections: 1) scientific and technological (S&T) inputs and outputs, 2) different layers of the AI value chain (foundation, technology, and application), and 3) different subdomains of AI (e.g. computer vision, predictive intelligence, and natural language processing). This approach reveals that China is not poised to overtake the U.S. in the technology domain of AI; rather, the U.S. maintains structural advantages in the quality of S&T inputs and outputs, the fundamental layers of the AI value chain, and key subdomains of AI. 

China’s AI Policies

The key, guiding document of China’s AI strategy in both the domestic and international realm is the State Council’s July 2017 AI Development Plan (AIDP). The plan laid out key benchmarks for China’s AI industry, sent a clear signal that AI was a national-strategic level priority, and emphasized priority areas where government action could cultivate a favorable environment for sustainable, technical advances. 

China’s Industrial Ecosystem in AI 

The key players in China’s AI industry can be roughly divided into established technology giants, who can leverage data from their respective user bases to optimize existing algorithms, and new startups, who are pushing the leading technological edge. The Ministry of Science and Technology (MoST) chose a mix of these giants and startups to lead the development of national AI open innovation platforms as part of a “national team” [国家队]. The team’s members include: Baidu (autonomous driving), Alibaba (smart cities), Tencent (medical imaging), iFlytek (intelligent voice), and Sensetime (intelligent vision).