月份：2017年12月

By Edward Tse | The WorldPost
October 19, 2017

SHANGHAI — If all goes as planned, China hopes to be the world leader in artificial intelligence by 2030. If successful, Beijing’s “moonshot” initiative – recently unveiled by the government – has the potential to be a game-changer not just for Chinese society but for global geopolitics as well.

My bet is that China will indeed reach its goal over the next decade, in part because of how far it has already come. While so much of the world today lacks clear direction, China has an edge in its ability to combine strong, top-down government directive with vibrant grassroots-level innovation.

Beyond this, China has an abundance of data to train AI-learning algorithms because of its huge population of Internet users – more than 700 million. China’s thriving mobile Internet ecosystem also provides a test bed for AI researchers to collect and analyze valuable demographics and transactional and behavioral big data and to conduct large-scale experiments at a much higher level than foreign counterparts.

This combination places Beijing in a unique position to dominate AI in just over a decade. It would be imprudent to expect otherwise. To understand why, look no further than the country’s current technological advancements.

China is investing in AI at the local level
Today, a number of local governments in China are offering financial incentives to encourage AI-related innovations. With the government’s assistance, Guizhou, one of the poorest provinces in the country, has become known as China’s “big data hub.” Major Internet companies such as Apple, Alibaba, Tencent and Qualcomm have set up new big data centers in the province, in large part due to this initiative. And in 2016, government data reported a 10.5 percent growth in Guizhou’s gross domestic product, one of the highest GDP increases among China’s provinces and municipalities.

Another example is the municipality of Chongqing. It was one of the first municipalities in China to establish a bureau to support local AI development. In May, Chongqing partnered with Baidu, a local search engine, to foster AI and big data. Elsewhere in China, Xiong’an New Area, a newly established district near Beijing, and Guangdong-Hong Kong-Macau Greater Bay Area, a city cluster, have also incorporated AI in their development plans as a key economic growth engine.

Workers test the functions of a giant robot as they set up a robot exhibition in Hefei, Anhui province. Sept. 26, 2013. (Reuters/)

China is inspiring tech to prioritize AI
The Chinese government’s favorable policies have inspired innovations across a wide range of tech players in the country. Leading Internet giants such as Baidu, Alibaba and Tencent, rising start-ups like iCarbonX and SenseTime, as well as “unicorns” – companies that have reached $1 billion valuation – like Didi Chuxing and Xiaomi are either adopting AI technology already in their operations or investing in it.

Baidu, for example, has shifted its company strategy from “mobile-first” to “AI-first.” Some of its initiatives include DuerOS, a conversational AI system that can be integrated into smart devices such as speakers, televisions and refrigerators; Project Apollo, an open source platform for the research and development of autonomous vehicles; and Baidu Brain, an AI platform with 60 different AI-enabled services. Its rival Tencent has also established its own AI lab, which developed the software that famously defeated high-ranking Japanese “Go” player Ryo Ichiriki earlier this year.

Additionally, Chinese health care start-up iCarbonX is building a digital “ecosystem” using AI technology to collect users’ biological and psychological data, provide personalized health analysis and predict users’ health status. And SenseTime, a Chinese AI start-up founded in 2014, focuses on innovative computer vision and deep learning technology. In July, SenseTime claimed it had raised the largest single round investment in AI globally at $410 million.

Alpha1 Pro, a humanoid robot for entertainment and education, at the Canton Fair in Guangzhou, China. Oct. 16, 2017. (Venus Wu/Reuters)

Still, there are some significant gaps to close before China becomes the world leader in AI. According to a recent AI report from Tencent Research Institute, the number of AI companies in China lags behind those in the United States, especially in the areas of core components and processes. China still falls short of the U.S. when it comes to new ideas and research related to AI but appears to have the upper hand in the application and implementation of these AI technologies.

Another potential challenge is geopolitics. According to an unreleased Pentagon report cited by Reuters, the U.S. government views Chinese investments in American AI start-ups as a potential threat to national security. As a result, the U.S. wants to scrutinize cross-border investment in sensitive AI technologies. On top of that, the Trump administration has proposed a 10 percent cut to the National Science Foundation’s spending on “intelligent systems.” This could present potential opportunity for China, through strong government support and financial incentives, to attract U.S. talent to set up AI labs and conduct pilots in China.

China has some work to do before it successfully harnesses the potential of AI. But it has the resources and talent to reach its goal – and now it has the political will to make it a national priority. That combination will be hard to beat.

This was produced by The WorldPost, a partnership of the Berggruen Institute and The Washington Post.

Edward Tse is the founding chief executive of the consulting firm Gao Feng Advisory Company. He has worked with the World Bank, the Asian Development Bank and the Chinese government on state-owned enterprise reform.

By Dr. Edward Tse

A few weeks ago, I had a meeting with the APAC head of a major Fortune 500 company at his office in Shanghai. It was the first time we met and the meeting was very enjoyable. He told me that he had arrived in China around six months ago and was sent from headquarters to run their Asia business with a particular focus on China.

He said he thought he would come to China to “teach.” While he knew China was a fast-growing country economically (and that things in general were changing fast), he believed that China was still somewhat “backwards” in terms of corporate management know-how and lacked innovation. In fact, many people still perceive China as a “nation of copycats”.

Since landing in China, he confirmed the pace and intensity of change in China, of course. That was easy. However, he was struck by the speed and magnitude of innovations taking place in China. He cited the dock-less bike sharing phenomenon, where literally over night the streets of Shanghai became overrun with thousands of bikes. Critically, this turned out to be a product/service that people really embraced rapidly. The way that Chinese innovations are taking place, he concluded, is often quite different from what he knew back in the United States.

He concluded his story by saying, “I thought I would come to China to teach, but instead I found out that I am here to learn. Or, at least to both teach and learn.”

This kind of reflections is becoming more and more prevalent among expat executives in foreign multinational companies (MNCs) in China. In the older days, i.e., a couple of decades ago, the “I come to teach” mindset was very common. Sure enough, back then China was at the early stage of its economic and political reform and opening-up. It was still at the initial stage of its transition from a planned economy to a so-called market economy. State-owned enterprises (SOEs) were dominant and privately-owned enterprises (POEs) were only at their infancy.

Corporate management practices in the modern definition were just being picked up by the Chinese. Copycats (“Shanzhai companies”) were all over. MNC executives who came to China during this time appropriately felt the knowledge and experiential advantage. For those who were compelled, they felt they could teach the Chinese.

As China grew, things evolved rather quickly. While SOEs continued to dominate some sectors, POEs were growing much faster, especially in sectors that were not as regulated. With the increasing prevalence of technology, driven by wireless internet, the leading POEs turned out to be not only entrepreneurial but also very innovative. They identified market opportunities and swiftly created new business models, often enabled by technology, to address major market pain points. Some of them have grown extremely fast creating what we call “exponential organizations” and in the process their executives also picked up a great deal of knowledge and experience on how to better manage businesses.

Source: Baidu.com

Today, innovation and entrepreneurship continue to pick up steam in China. Entrepreneurs are getting younger. Many of them are “post-80s” and “post-90s”. They can be found not only in major hubs like Beijing, Hangzhou and Shenzhen, but also in many lower-tier cities. They are dabbling in all sorts of start-ups across many industry sectors. Even more established companies have found they needed to change and to re-invent themselves in order to capture the new opportunities or at least not be marginalized. Many Chinese business executives are looking for inspirations from the cutting-edge development in technology, strategy, business models, organizations, and processes. More of them have concluded that while they were trying to learn from (“benchmark”) the western best practices in business and management a decade or two ago, they are now less able to identify appropriate western benchmarks for their growth going forward. Many of them need to figure out their own ways.

Across many sectors, Chinese companies are becoming strong competitors to western MNCs in China. They are not only fast, agile and adaptable (“they do everything”), but also increasingly sophisticated and innovative. At least the leading ones are. Most people by now know the likes of Alibaba, Tencent and Baidu, as well as Didi and DJI, but there are lesser known entrepreneurial companies such as Liby (household cleaning products), Jovo (Chinese alcoholic beverages), Three Squirrels (nuts and snacks), Lepur (yogurt) and Hema (grocery retail) that are disrupting their respective verticals including the major foreign incumbents. Examples of such are numerous and the number is increasing every day.

Source: Baidu.com

While there are still plenty of copycat companies around, the front end of the curve is driven more and more by innovative companies. They generate new ways of doing businesses and the leaders of these businesses also tend to be good students. To this end, MNCs found that their original superior positions are no longer guaranteed. They must adapt their strategy, organization and business models to China (and increasingly transfer their learnings from China to the rest of the world). There is no doubt that in some areas MNC expat executives still have things to teach the locals. And many of the locals are still open to learn. However, the reverse is also becoming true. MNC expat executives are quickly finding that they can learn a great deal from the local businesses. “The Chinese Way” is no longer a universally negative notion but increasingly being appreciated as ingenious and value-adding.

The transition from “I come to teach” to “I come to both teach and learn” took place over a relatively short period of time. The role of China in global business has evolved significantly during this period and one would expect more to come, perhaps with even higher speed and stronger intensity.