By: Azhar Azam
*This is one of my opinion pieces (unedited) that first appeared in "The Express Tribune":
https://tribune.com.pk/story/2075115/6-china-us-tech-war-around-corner/
While the Finance Committee of Chinese state council was deliberating on the importance to accelerate the opening of financial industry, encourage overseas financial institutions and funds to enter into the domestic financial market, and enhance the viability and competitiveness of Chinese financial system – Trump administration was reportedly mulling over the option to block small Chinese firms to enter into the US capital markets.
Although US treasury official Monica Crowley refuted the reports that Washington is considering such measures to prevent the initial public offerings (IPOs) of Chinese startups but the part of her statement “at this time” explicates a cloaked US intent to use the move as leverage in near future.
At a time when the People’s Republic of China (PRC) is rejoicing the 70th anniversary of its founding, it indeed wasn’t a gesture of goodwill from the United States and again implied a preemptive attempt to pile up pressure on China ahead of the looming trade talks.
But the shocks were strong as the major US stocks immediately stumbled after the news about delisting of small Chinese companies shook the markets. The technology-driven Nasdaq was hit the hardest that plunged by 1.18 percent.
Since the shares of Chinese digital conglomerates – Alibaba, JD.com, and Baidu –also dove 5.15%, 5.95%, and 3.67% respectively – the US intent apparently leaked its intent to take market feedback and to anticipate the potential repercussions of if it pursues the path of stopping the rapid growth of Chinese giants in the area of artificial intelligence (AI).
In July 2017, State Council released a three-step roadmap (by 2020, 2025, and 2030) to make China the world leader in AI by 2030. With the aim of expanding the AI industry to one trillion yuan, Beijing planned to set up an initial funding of 100 billion yuan alongside 10 public platforms for AI innovation, six demonstration zones, and 60 AI applications.
Last month, China choreographed the 2019 World Artificial Intelligence Conference that witnessed 500 global guests and more than 300 domestic and international companies to showcase their AI applications in the technology festival.
In the exhibition area of the conference, the “chip wall” not only demonstrated the most advanced chips and indigenously-built chips from Huawei but it was also draped with chips from several other Chinese unicorn startups such as YITU Technology, Cambricon, Horizon Robotics.
Since Beijing is largely reliant on US Qualcomm and Intel to meet its massive semiconductor demand, the Chinese pursuit of self-sufficiency in chips is hard for the US to swallow. Trump administration would, therefore, would try to root out any Chinese company that could challenge the US dominance in global chip market.
US concerns levitated last week after Alibaba followed Huawei and unveiled its chip Hanguang 800 for artificial intelligence. In addition, Alibaba is keenly focusing on using AI across the areas from shopping to healthcare while Baidu runs a research lab in the Silicon Valley to explore driverless cars.
Alibaba, Baidu, Huawei, and Tencent all are investing heavily on AI – something worrisome for the US technology companies and the Trump administration. US frights with the hefty funds allocation to research and development on AI, Beijing is rapidly narrowing the technology gap with Washington.
The panic was obvious when earlier this month the US technology chief Michael Kratsios warned the US President Donald Trump that China is speeding up its AI race to catch up America and could soon threat its dominance in global artificial intelligence.
Kratsios was speaking on a forum organized by Center for Data Innovation (CDI). It is the same non-partisan, non-profit research organization that previously found that the US is currently leading in four out of six categories of AI metrics (talent, research, development, and hardware, with China leads in two (adoption and data). China was nearly at par with the US on talent as well so both the sides were almost tied in the study conducted by CDI.
Trump’s tech head remarks coincides with another report by Council of Foreign Relations (CFR) which stressed that China is a major threat in emerging technologies including AI. It further noted that China is closing the technology gap with the US and it will soon be one of the leading powers in technologies such as AI, robotics, energy storage, fifth-generation cellular networks (5G), quantum information systems, and possibly biotechnology. The paper feared that Chinese rapid growth in the field of AI could quickly concede Washington’s leadership position to China.
While US Department of Defense (DOD) asserted in its AI strategy that China is making significant investments in AI for military purposes, there seems to be a broad consensus among all US State’s departments and research organizations to put brakes on Chinese AI boom.
Although global analysts agree “China’s ambition is unstoppable to become a global leader in tech” with or without trade war, Beijing still needs to be vigilant rather should be well-prepared for US-waged technology war.
*This is one of my opinion pieces (unedited) that first appeared in "The Express Tribune":
https://tribune.com.pk/story/2075115/6-china-us-tech-war-around-corner/
While the Finance Committee of Chinese state council was deliberating on the importance to accelerate the opening of financial industry, encourage overseas financial institutions and funds to enter into the domestic financial market, and enhance the viability and competitiveness of Chinese financial system – Trump administration was reportedly mulling over the option to block small Chinese firms to enter into the US capital markets.
Although US treasury official Monica Crowley refuted the reports that Washington is considering such measures to prevent the initial public offerings (IPOs) of Chinese startups but the part of her statement “at this time” explicates a cloaked US intent to use the move as leverage in near future.
At a time when the People’s Republic of China (PRC) is rejoicing the 70th anniversary of its founding, it indeed wasn’t a gesture of goodwill from the United States and again implied a preemptive attempt to pile up pressure on China ahead of the looming trade talks.
But the shocks were strong as the major US stocks immediately stumbled after the news about delisting of small Chinese companies shook the markets. The technology-driven Nasdaq was hit the hardest that plunged by 1.18 percent.
Since the shares of Chinese digital conglomerates – Alibaba, JD.com, and Baidu –also dove 5.15%, 5.95%, and 3.67% respectively – the US intent apparently leaked its intent to take market feedback and to anticipate the potential repercussions of if it pursues the path of stopping the rapid growth of Chinese giants in the area of artificial intelligence (AI).
In July 2017, State Council released a three-step roadmap (by 2020, 2025, and 2030) to make China the world leader in AI by 2030. With the aim of expanding the AI industry to one trillion yuan, Beijing planned to set up an initial funding of 100 billion yuan alongside 10 public platforms for AI innovation, six demonstration zones, and 60 AI applications.
Last month, China choreographed the 2019 World Artificial Intelligence Conference that witnessed 500 global guests and more than 300 domestic and international companies to showcase their AI applications in the technology festival.
In the exhibition area of the conference, the “chip wall” not only demonstrated the most advanced chips and indigenously-built chips from Huawei but it was also draped with chips from several other Chinese unicorn startups such as YITU Technology, Cambricon, Horizon Robotics.
Since Beijing is largely reliant on US Qualcomm and Intel to meet its massive semiconductor demand, the Chinese pursuit of self-sufficiency in chips is hard for the US to swallow. Trump administration would, therefore, would try to root out any Chinese company that could challenge the US dominance in global chip market.
US concerns levitated last week after Alibaba followed Huawei and unveiled its chip Hanguang 800 for artificial intelligence. In addition, Alibaba is keenly focusing on using AI across the areas from shopping to healthcare while Baidu runs a research lab in the Silicon Valley to explore driverless cars.
Alibaba, Baidu, Huawei, and Tencent all are investing heavily on AI – something worrisome for the US technology companies and the Trump administration. US frights with the hefty funds allocation to research and development on AI, Beijing is rapidly narrowing the technology gap with Washington.
The panic was obvious when earlier this month the US technology chief Michael Kratsios warned the US President Donald Trump that China is speeding up its AI race to catch up America and could soon threat its dominance in global artificial intelligence.
Kratsios was speaking on a forum organized by Center for Data Innovation (CDI). It is the same non-partisan, non-profit research organization that previously found that the US is currently leading in four out of six categories of AI metrics (talent, research, development, and hardware, with China leads in two (adoption and data). China was nearly at par with the US on talent as well so both the sides were almost tied in the study conducted by CDI.
Trump’s tech head remarks coincides with another report by Council of Foreign Relations (CFR) which stressed that China is a major threat in emerging technologies including AI. It further noted that China is closing the technology gap with the US and it will soon be one of the leading powers in technologies such as AI, robotics, energy storage, fifth-generation cellular networks (5G), quantum information systems, and possibly biotechnology. The paper feared that Chinese rapid growth in the field of AI could quickly concede Washington’s leadership position to China.
While US Department of Defense (DOD) asserted in its AI strategy that China is making significant investments in AI for military purposes, there seems to be a broad consensus among all US State’s departments and research organizations to put brakes on Chinese AI boom.
Although global analysts agree “China’s ambition is unstoppable to become a global leader in tech” with or without trade war, Beijing still needs to be vigilant rather should be well-prepared for US-waged technology war.