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Home > 2021 > China’s AI Driven Techno-Economic Hegemony | Pattnaik and Pradhan

Mainstream, VOL LIX No 25, New Delhi, June 5, 2021

China’s AI Driven Techno-Economic Hegemony | Pattnaik and Pradhan

Friday 4 June 2021

by Jajati K. Pattnaik & Rudra P. Pradhan *

China is seen to be investing heavily in the Artificial Intelligence (AI) driven techno- economic domain to shape and control the transnational space in order to gain global market advantages. It is noticed that the world mode of production which has evolved from manufacturing economy to knowledge economy — a phenomena of fourth Industrial Revolution [1] — largely thrust upon algorithm, big data and decision tree as new mode of wealth creation to integrate production variables for higher profitability. Taking a cue from this, Beijing has provided sufficient scope to boost AI culture through computer gaming like ‘Alpha Go’ which is defined as an abstract strategy of computer programme-based board game played between the two players. The event was moderately covered in Western media. In China, however, it was a major national event and some 280 million viewers watched the game live and Beijing described the event as ‘Sputnik moment’ for AI development in China. [2] While the older generation Chinese familiar with revolution, cold war, and contradictions of capitalism and communism may not appreciate or understand the new generation themes and market potentials of gaming, it is the young and tech savoir-faire younger generation that drove the cyber market as the largest users.

China’s AI Culture

China’s 2016 AI strategy clearly highlighted its AI investment plans and long-distance objectives. The document clarified that it would focus on linking Chinese economic development through higher AI investments and explored possibilities for funding its sources. [3] The State Council- the chief administrative authority of the Peoples Republic of China (PRC) released the country’s AI strategy document titled as “New Generation Artificial Intelligence Development Plan” in July 2017. The strategic plan has three clear objectives. First, it aims to become AI world leader by 2030. Second, to capitalize and monetize AI economy as a trillion Yuan industry i.e. US $ 150 billion and finally, to emerge as the driving force in defining AI governance in the world. [4] The perspective plan proposed to inject a financial intervention of US $ 150 billion for AI intervention in the Chinese industrial productivity. [5]

Grand objective is indeed to become AI Super Power by 2030- a 15 year vision plan! If the global movement towards AI becomes a reality which is likely to be the case, future super powers will not wage wars with bombs and armed forces but those who would be waging war from their AI labs with far reaching consequences. They will be able to alter enemy country’s financial data, disrupt their energy supply, change climate and river course and much more with huge damaging impact.

Further, China’s “Three Year Action Plan for Promoting Development of a New Generation AI Industry (2018-20)” added AI as a national priority while benchmarking the already accomplished task on the sector. The plan categorically outlines China’s AI development focus areas and its proliferation strategy including investment and possible AI infrastructure. In order to develop AI ecosystem, specific industries and sub-technologies within the scope of AI were to be built or supported with necessary infrastructure. China’s prominent AI driven industries, technologies, and products are:
 (a)Integrated AI Systems- drones, service robots, networked vehicles, image assisted medical diagnostic systems, video image identification systems, voice-interface systems, translation modules and smart home appliances etc.;

 (b) smart hard ware and soft ware Consolidation Modules: neural network chips, sensors, open source platforms and several such modules;

and(c) network security and other industrial public support systems to improve the artificial intelligence development environment standard testing and intellectual property service platform, intelligent manufacturing and industrial support resource pool, intelligent network infrastructure and range of such industrial and domestic use systems. [6]

AI Economy & Global Investments

AI economy could grow up to US $ 15trillion by 2030 as per Oxford Insight. Global North is far well positioned than their Global South counterparts to benefit from the emerging AI economy and ecosystem. As AI driven economic advantages begin to benefit the North more, the countries of South are expected to lose out leading to rising global inequalities. The fourth Industrial revolution driven by algorithm and AI therefore could drive Global South countries to further economic challenges as was the case in earlier industrial revolution period.

As the narrative goes, China is investing far too many dollars than the US in the emerging AI sector and certainly spending more in military AI for a distant future world order advantage. Washington policy circles further intended to caution the US policy planners that their country’s global tech advantage as well as their economic security and their deep rooted democratic values could be well under threat from Beijing’s AI aggression.

Irrespective of the narratives, China’s AI investments are certainly a matter of concern for the American policy planners and undoubtedly there is Washington-Beijing AI super power race and rivalry. Beijing meanwhile has a very conducive industrial climate. It has achieved a visible alignment between the government, private sector, investors, and the academia towards a larger ‘China Dream’- the great geopolitical game in which AI is a techno weapon. Dozens of Chinese MNCs and several other critical players and stakeholders are projected towards this end in a rather covert and closed loop ecosystem. Moreover, China’s large domestic market, 1.4billion population and large consumer data base increasingly open to ‘AlphaGo’, cyber gaming and myriad formats of AI based economic modules add to its advantages as well. [7]

What does it mean to the World?

AI driven techno-economic incorporation in economic globalization is also maturing to its next generation to encompass digi-currency, block-chain, beidou navigation system to smart warfare including cyber aggression that propose to change the way business of the world ever operated. Economy to Warfare, productivity to travel and even currency and global transaction modes are all set to undergo transformation.

Technology and factors of production being in spectacular alliance to deliver windfall economic gains and unusual control over global resources, there is huge global competition to take advantage of this alliance and all its possibilities. While Western Europe followed by North America and later Japan were the industrial leaders in the last century, the game of leadership is visibly shifting to Asia in the 21stcentury.

China’s emergence as a techno-economic power in the last over two decades is set to recast the language and order of the game itself. Beijing’s decisive control over strategic and critical industrial use materials like steel and rare-earth brings it to an enviable position of global techno-economic productivity landscape. Assured of this economic success and confident of huge forex reserve, China’s export led economic growth has nourished a larger ambition- popularly referred as ‘China Dream’ which is a native Chinese imagination of creating a ‘World Order’ that is Sino-centric in character. It seems to alter ‘White’ and ‘Euro Centric’ world order and replace it with Chinese variant large called as ‘Tianxia System’ [8] - a Confucian model of governance and engagement order. As it is seen today, President Xi Jinping has taken all cudgels to see the ‘China Dream’ take visible shape and the country to gain the lost glory and emerge as a world leader both in terms of material and global value system.

China monopolizes the global supply chains through block chain technology under the carpet of Belt and Road Initiative (BRI). [9] To materialize China dream, President Jinping visualizes block chain as “an important breakthrough” and Beijing would “seize the opportunity” [10] Moreover, it will “take the leading position ... occupy the commanding heights of innovation and gain new industrial advantages”. [11] Quite parallel to this, Professor Michael Sung- Chairman and founder of ‘Carbon Blue Innovations’ has very optimistic view of Chinese Block Chain future. Michael Sung envisages that “Chinese initiated Block chain-based Services Network (BSN) will be the backbone infrastructure technology for massive interconnectivity throughout the mainland, from city governments to companies and individuals alike. [12] The network will also form the backbone to the Digital Silk Road to provide interconnectivity to all of China’s trade partners around the globe. Simultaneously it is anticipated that under the pretext of BSN, Beijing is working towards dismantling of dollar as a global currency, trimming down global technological reliance on the US. [13]

Alarming developments indeed! Global supply chains suddenly got disrupted in the wake of COVID-19 pandemic. Restoration of supply chains is highly necessary to augment growth and inject liquidity into the market. The neo-liberal pundits opined that Block Chain Technology (BCT) would fill the business vacuum in the post covid-19 period providing universal access to information on the production, distribution and consumption patterns in the public domains. At a moment, if agreed to those opinions, it might accord a fresh lease of life to many of the battered industries in the recession period. But the most debatable point is that Beijing in the process has managed great command over BSN and its gateway access as well. Hence, the question arises; would the economies of Asia, Africa and Latin America have scope of universal and transparent access to the BSN? Or they would succumb to the interests of China and the Chinese corporate giants? 

Conclusion

The answer may be more plausible in the latter. Moreover, at a time when China is flexing its muscles for visible geopolitical gains, it is crucial that China-centric global supply chains must be decoupled and be spread horizontally to achieve the true objectives of multilateralism. Otherwise, global order would slip into China dependence asymmetry and would disturb the global demand-supply chains raising the possibility of asymmetric vulnerabilities being employed by China for its own strategic advantage. Moreover, Beijing’s economic relations against its partners are all-pervasive and its charm offensive formula under the pretext of ‘Peaceful Rise’ is overbearing, creating space for the emergence of a rouge hegemon in Asia as well. Hence, US, EU, Australia, Japan, India and other emerging economies must converge their efforts to dismantle the Beijing-centric global supply chains and ensure an equitable, transparent and sustainable techno-economic world order for shared partnership and dividends.

(Authors: Dr. Jajati K.Pattnaik is Associate Professor at the Centre for West Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi.; Dr. Rudra P. Pradhan is Associate Professor at the Department of Humanities & Social Sciences, BITS Pilani (K K Birla Goa Campus), Goa.)


[1Klaus Schwab, founder of World Economic Forum, who coined the term Fourth Industrial Revolution in 2016 wrote: “The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres. The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance. The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.” “The Fourth Industrial Revolution: What it Means, How to Respond”, World Economic Forum ,14 January 2016, https://www.weforum.org/agenda/2016/01/the-fourth-industrial-revolution-what-it-means-and-how-to-respond/ (accessed on 18 March 2021).

[2Huw Roberts,Josh Cowls ,Jessica Morley et al. , “The Chinese Approach to Artificial Intelligence: An Analysis of Policy, Ethics, and Regulation”, AI & Society , 17 June 2020, pp.59-77. https://link.springer.com/article/10.1007/s00146-020-00992-2/figures/1 (accessed on 15 February 2021).

[3Daniel Faggela, AI in China – Recent History, Strengths and Weaknesses of the Ecosystem, Emerj Artificial Intelligence Research, 5 April 2019, https://emerj.com/ai-market-research/ai-in-china-recent-history-strengths-and-weaknesses-of-the-ecosystem/ (accessed on 28 April 2021).

[4.Roberts, No.1.

[5Faggela No.3.

[6.Ibid.

[7Ibid.

[8Tianxia meaning “All under Heaven” has three concepts. Firstly, the world denotes three connotations:(i) ‘the earth or all lands under the sky;’(ii) ‘a common choice made by all peoples in the world, or a universal agreement in the hearts of all people;’ and (iii) ‘a political system for the world with a global institution to ensure universal order’. Secondly, it ‘is the exclusion of nothing and no one’ ‘or put it differently, the inclusion of all peoples and all lands’.Thirdly,it ‘insists on the importance of a world institution as the highest political entity or authority capable of caring for the entire world.’ Moreover, it imagined a ‘world system characterized by harmony and cooperation without hegemony.’
See, Zhang Feng, “The Tianxia System, World Order in a Chinese Utopia”, No 21, March 2010, http://www.chinaheritagequarterly.org/tien-hsia.php?searchterm=021_utopia.inc&issue=021 (accessed on 12 April 2021. In practice, Chinese Tianxia seems to be hegemonic by expanding its geo-political ad geo economic ambitions in the 21stCentury.

[9BRI (Belt and Road Initiative),earlier known as OBOR(One Belt and One Road ) was unveiled by the President Xi Jinping of the Peoples Republic of China in 2013 for ‘infrastructure development and economic integration of countries along the route of historic silk road.’ Further, Officially , the project intended to “promote the connectivity of Asian, European and African continents and their adjacent seas, establish and strengthen partnerships among the countries along the Belt and Road, set up all-dimensional, multi-tiered and composite connectivity networks, and realize diversified, independent, balanced and sustainable development in these countries.” .BRI has two components . One is land based Silk Road Economic Corridor which consisted of six corridors;(i) New Eurasian Land Bridge Economic Corridor (NELBEC);(ii)China-Mongolia-Russia Economic Corridor (CMREC);
(iii)China – Central Asia – West Asia Economic Corridor (CCWAEC);
(iv) China – Indochina Peninsula Economic Corridor (CICPEC);
(v)China – Pakistan Economic Corridor (CPEC); and (vi) Bangladesh – China – India – Myanmar Economic Corridor (BCIMEC). After India’s objection, BCIMEC was dropped from the BRI project. The another is the 21st Century Maritime Silk Road (MSR)Project which links “ China to Southeast Asia, Indonesia, India, the Arabian peninsula, Somalia, Egypt and Europe, encompassing the South China Sea, Strait of Malacca, Indian Ocean, Gulf of Bengal, Arabian Sea, Persian Gulf and the Red Sea.” Recently, Polar Silk Road (PSR) has been added to China`s Arctic strategy to construct a “Polar Silk Road” under the BRI.” See, Belt and Road Initiative, https://www.beltroad-initiative.com/belt-and-road/ (accessed on 15 April 2021).

[10“President Xi Says China Should ‘Seize Opportunity’ to Adopt Blockchain”, https://wundef.com/president-xi-says-china-should-seize-opportunity-to-adopt-blockchain/ (accessed on 16 April 2021).

[11M. Jiang, “Xi Jinping’s Speech at the 18th Collective Study of the Chinese Political Bureau”, 15 November 2012,
https://www.bbc.com/news/world-asia-china-20338586 (accessed on 11 Mar h 2021).

[1212Michael Sung, “China’s National Blockchain Will Change the World”, 24 April 2020, https://www.coindesk.com/chinas-national-blockchain-will-change-the-world (accessed on 1 March 2021).

[13Ibid.

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