Intelligence Brief: China pushing for AI dominance – Mobile World Live

Intelligence Brief: China pushing for AI dominance

27 MAR 2019

At the GSMA’s China Week this year, stakeholders from the technology, media and telecommunications industry met in Beijing to engage and debate, and to reflect on key takeaways from MWC19 Barcelona.

Though I was unable to attend in person, the event also marked the culmination of a recent project of mine, with the launch of GSMA Intelligence’s (GSMAi) Mobile Economy China 2019 report. Here, we discuss major issues for the country’s broad mobile ecosystem, including operator financials; 5G; e-commerce; blockchain; and AI.

Mobile consumers have helped create a huge online marketplace
Chinese mobile users are enthusiastic social networkers and many are active on IP-based messaging apps. Tencent’s WeChat is now used by more than 1 billion people every day. China is also home to some of the most avid participants in e-commerce globally: the latest GSMAi Consumer Survey shows 69 per cent of smartphone owners use their devices to purchase goods or services online every month, with an additional 16 per cent doing so less frequently.

More significant, however, is how the intrinsic link between consumerism and the smartphone has established China as a contactless superpower. The main mobile apps are typically multipurpose platforms, offering travel booking and gaming, and incorporating digital wallet services (for example Alipay and WeChat Pay), which are now accepted in most bricks-and-mortar retailers. Some 81 per cent of smartphone owners use their devices for contactless mobile payment technology at least once per month, a substantially higher proportion than in some digitally advanced markets (see chart, below, click to enlarge).

Consequently, China has become the world’s largest market for B2C e-commerce, with a turnover of RMB1.7 trillion ($253 billion) in 2017, a 30 per cent annual growth rate. For Chinese consumers, Singles’ Day on 11 November is the year’s largest online shopping day, with sales valued at more than Black Friday and Cyber Monday combined.

It was adopted first by Alibaba in 2009, which racked up RMB213.5 billion on its e-commerce platform on the day in 2018.

Looking ahead, mobile data traffic growth will support greater use of online payment platforms and further development of the Chinese digital commerce market. In particular, growing smartphone adoption in rural areas and the extension of 4G services to the most remote communities will see more transactions conducted here, while also delivering benefits for social, economic and financial inclusion.

Wireless broadband connectivity enables the digitalisation of sectors, which can lead to increased efficiency and productivity, and positive knock-on effects for the wider economy.

Targeting AI dominance by 2030
With IP-based communication, social networking and e-commerce prominent features of consumers’ mobile experience, the government’s focus is elsewhere. It is aiming to weave AI into the fabric of Chinese society, which it views as a strategically important technology for reinvigorating traditional industries and for future national prosperity. In 2017, China published its three-stage Next Generation Artificial Intelligence Development Plan, which recognises the need to first achieve parity with the US. The second phase focuses on formulating legislation and making breakthrough applications of AI in various sectors by 2025, after which China is aiming to achieve global AI leadership during the third five-year period.

In light of this initiative, China’s tech companies are recruiting and investing heavily in AI. Consider just a few high-profile examples:
– Baidu is looking to develop and commercialise AI across several verticals, for example, the Apollo project for autonomous vehicles.
– Through the Damo Academy, its R&D arm, Alibaba is also working to produce its first in-house AI chips and quantum processors.
– One of Tencent’s major AI priorities is healthcare, where it is using data to help train AI algorithms for the development of virtual healthcare assistants.

Chinese mobile operators are also recognising AI’s strategic importance for future business and digital transformation, as well as driving autonomous and intelligent networks. China Mobile and Nokia are researching the use of AI and machine learning for 5G network security and reliability. China Telecom is working with Nokia and Intel to develop an AI-supported cloud network for the delivery of mass-market services with extremely low latency, while China Unicom is serving as deputy directing unit of the AI Industry Development Alliance of China.

The government hopes these investments and partnerships will combine to create a domestic industry worth RMB1 trillion by 2030. However, as applications of AI multiply and the technology matures, potential pitfalls have emerged. Facial recognition is raising questions around privacy and surveillance, while there are challenges to determining the liability and responsibilities of people and algorithms in self-driving cars.

These concerns are not unique to China and will require all countries to engage with AI’s ethical dimension, an area where the European Union is already making progress. Given that the impact of AI will be felt around the world, it is incumbent on all members of the global mobile ecosystem to coordinate and collaborate to embed the right values and governance framework at the centre of the AI debate.

 – James Robinson – Senior Analyst, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

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