China winning the global AI race

So far, China is winning. The rise of China as a leading player in AI research has been revealed by new figures showing how quickly the country is gaining on the US^[30]. The 2019 AI Index Report, put together by US academics and researchers, found that Chinese companies are on average receiving millions of dollars more in investment than their Western counterparts.

Why and how is China becoming so powerful here? For a start, China has developed a completely different version of the internet than the one the Westernized world is using. And it is all based on phone technology using WeChat, a messaging platform that is very much like WhatsApp. WeChat was developed by Tencent, a social media giant, and it has quite literally exploded, becoming ubiquitous in Chinese business, culture, and society. WeChat has become completely integrated into people's lives simply because all transactions can be accomplished using a tool in the palm of your hand.

Its rise has been quick and is accelerating. WeChat now has more than a billion monthly active users (1.17 billion as of Q1 2020^[31]) and a significant portion of all Chinese data traffic. It is the "app for everything," acting as a social network, a payment system, a communication medium, and, perhaps most ambitiously, the infrastructure for business transactions through its "mini programs," which resemble Facebook pages.

The number of these mini programs is fast rising—it includes big companies like McDonald's as well as the many tiny businesses run in local communities—and on last count is equal to half the number of iOS apps available in Apple's App Store^[32]. Because the mini programs run inside WeChat, business customers don't have to sign up, log in, or add their credit card numbers, so it is easy and seamless. It is supremely clever.

In 2017, the Chinese Government published its ambitious national plan to become a global leader in AI research by 2030, with healthcare listed as one of four core research areas during the first wave of the plan. WeChat will be a core part of this plan, with the majority of China's 38,000 medical institutions registered on the platform, enabling patients to engage digitally.

WeChat is now used to self-diagnose, look up drug information, search medical information, schedule doctor appointments, and process healthcare payments.

Not surprisingly, WeChat gave China a significant advantage in managing the COVID-19 pandemic too. This includes its "Health Check" app, which takes self-reported data about places visited and symptoms to generate an identifying QR code that is displayed in green, orange, or red, corresponding to free movement and 7-day and 14-day quarantines.

In parallel with the explosion of WeChat, the Chinese Government is building a so-called "social credit system^[33]" that aims to collect and analyze information on its 1.4 billion citizens and rate millions of corporations, both domestic and foreign. Its goal is to keep local governments, businesses, and people in compliance with national directives.

Many Western commentators talk of social credit policy only in very negative terms, through its potential to abuse human rights and control citizens' behavior too heavily. This, of course, is a valid, justified position in many respects.

However, on the technological front, it is clever as a gigantic data sharing platform, with a universal "national API" allowing data from over 1 billion citizens to be accessed, shared, and leveraged. Adding in the magic dust of multimodal learning and edge computing, you can easily understand why China is leading the race in AI.

Through its social credit policy, China guides its citizens' behavior in ingenious ways—just like Big Tech does, but in the context of a completely different cultural, political, and ethical framework.

Businesses are imaginatively nudged to behave as model companies. Using AI, the system can rate firms for "credibility" or "sincerity." The higher the score, the more benefits companies have access to, but it goes the other way too—with blacklisted companies potentially being denied access to cheap loans or facing higher import and export taxes. For international businesses, the system looks at business contracts, social responsibility, regulatory compliance, and how many Communist Party members they employ to give a score.

In the West, China's Government is typically seen as a "citizen controller," but in China, they see the Government through a different cultural lens—as a record keeper, whose central job is to consolidate Government files. Keeping a central database of social credit records means that important information can be accessed by state agencies, city governments, banks, industry associations, and the general public, and data on individuals and companies can inform their own evaluations.

While China's Government does not issue social credit scores to every individual (as of September 2019, it has not issued a social credit score to any Chinese citizen), what it is doing is encouraging local governments to use social credit data to develop their own scoring systems for local residents.

Several cities in China have already rolled out such systems on a trial basis, and many more are gearing up. "My Nanjing" is a good example, tying together city transportation, environmental data, hospitals, utility providers, civil affairs bureaus, courts, schools, local financial institutions, and charitable organizations into a one-stop shop for citizen services. Once logged in, citizens are able to view certain aspects of their social credit files, including records of any state-issued awards and honors, unpaid bills, traffic violations, and any legal violations and administrative penalties received.

While My Nanjing doesn't issue social credit scores (yet), it does include a points system that nudges and rewards people for behavior that protects the environment, while improving their health. "Green points" are assigned to users based on their public transportation choices, with points earned for walking, biking, taking the bus, or riding the subway. Citizens can earn double points for not driving on heavily polluted days.

Doesn't this sound like something the West should have in place?