Advanced Technologies - for Industry - international reports Advanced technology landscape and related policies in China

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Advanced Technologies - for Industry - international reports Advanced technology landscape and related policies in China
May 2021
                                           1

Advanced Technologies
for Industry – international reports
Advanced technology landscape and related policies in
China
Advanced Technologies - for Industry - international reports Advanced technology landscape and related policies in China
ATI international report on China

       This report was prepared by Heidi Heimberger and Maria Karaulova; Fraunhofer ISI - with support
       from Henning Kroll, Fraunhofer ISI and Kincsö Izsak, Technopolis Group.

       EUROPEAN COMMISSION
       European Innovation Council and SMEs Executive Agency (EISMEA)
       Unit I.02.2 — SMP / COSME Pillar
       E-mail: EISMEA-SMP-COSME-ENQUIRIES@ec.europa.eu

       Directorate General for Internal Market, Industry, Entrepreneurship and SMEs
       Unit D.2 — Industrial forum, alliances, clusters
       E-mail: GROW-ATI@ec.europa.eu

       European Commission
       B-1049 Brussels
       LEGAL NOTICE
       The information and views set out in this report are those of the author(s) and do not necessarily reflect the official
       opinion of EISMEA or of the Commission. Neither EISMEA, nor the Commission can guarantee the accuracy of the
       data included in this study. Neither EISMEA, nor the Commission or any person acting on their behalf may be held
       responsible for the use, which may be made of the information contained therein.
       More information on the European Union is available on the Internet (http://www.europa.eu).

       PDF      ISBN978-92-9460-715-7 doi: 10.2826/573690              EA-03-21-300-EN-N

       © European Union, 2021

May 2021
Advanced Technologies - for Industry - international reports Advanced technology landscape and related policies in China
ATI international report on China

Table of Contents

       Introduction ........................................................................................................................ 4
       Section 1 .............................................................................................................................. 5
       1    Overall performance in advanced technologies .............................................................. 5
           1.1    Patent applications .................................................................................................. 5
           1.2    International competitiveness ................................................................................. 6
           1.3    Startup and scaleup activity .................................................................................... 6
       Section 2 .............................................................................................................................. 8
       2    Analysis of selected technology ecosystems: Artificial Intelligence and Big Data .......... 8
           2.1    Major players ........................................................................................................... 8
           2.2    Underlying conditions .............................................................................................11
           2.3    Policies, strategies and initiatives ..........................................................................13
            2.3.1       Major projects .................................................................................................... 14
           2.4    Lessons for Europe .................................................................................................15
       Section 3 .............................................................................................................................17
       3    Advanced Manufacturing and Robotics .........................................................................17
           3.1    Major players ..........................................................................................................17
           3.2    Underlying conditions .............................................................................................19
           3.3    Policies, strategies and initiatives ..........................................................................21
            3.3.1       Major projects .................................................................................................... 23
           3.4    Lessons for Europe .................................................................................................23
       Section 4 .............................................................................................................................25
       4    COVID-19 in China: Impact, response and recovery .....................................................25
           4.1    Impact of COVID-19 in China ..................................................................................25
            4.1.1       COVID-19 in China .............................................................................................. 25
            4.1.2       Overall economic impact ...................................................................................... 26
           4.2    China's COVID-19 related government restrictions.................................................27
           4.3    Economic measures ................................................................................................28
           4.4    Pandemic Technology Policy ...................................................................................30
           4.5    The impact of COVID-19 on Advanced Technologies in China .................................31
            4.5.1       Overall impact on Advanced Technologies .............................................................. 31
            4.5.2       Use of Advanced Technologies to combat the pandemic ........................................... 32
            4.5.3       New Infrastructure, Supply Chains and Tech Transfer .............................................. 34
       Bibliography .......................................................................................................................35
       About the ‘Advanced Technologies for Industry’ Project .....................................................45

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Advanced Technologies - for Industry - international reports Advanced technology landscape and related policies in China
ATI international report on China

Section

       Introduction

       The objective of the international country reports is to explore the technology and policy landscape of
       selected non-European countries. Country performance in advanced technologies is presented based on
       patent, trade and investment data. This particular report is an update and extension of the China report
       published in 2020 (available at https://ati.ec.europa.eu/reports/international-reports/report-china-
       technological-capacities-and-key-policy-measures) and zooms into two technology ecosystems notably
       into Artificial Intelligence/Big Data and Advanced Manufacturing/Robotics. The reason why these fields
       have been selected is that they represent technologies where China has been developing particularly
       fast recently and important lessons can be drawn for the EU. The analysis relies on the data collected
       within the ATI project complemented with expert opinion.
       The starting point of this analysis has been sixteen advanced technologies that are a priority for
       European industrial policy and that enable process, product and service innovation throughout the
       economy and hence foster industrial modernisation.
       Advanced technologies are defined as recent or future technologies that are expected to substantially
       alter the business and social environment and include Advanced Materials, Advanced Manufacturing,
       Artificial Intelligence, Augmented and Virtual Reality, Big Data, Blockchain, Cloud Technologies,
       Connectivity, Industrial Biotechnology, the Internet of Things, Micro and Nanoelectronics, Mobility,
       Nanotechnology, Photonics, Robotics and Security. The full methodology behind the data calculations is
       available on the ATI website: https://ati.ec.europa.eu/reports/eu-reports/advanced-technologies-
       industry-methodological-report.
       The report is structured as the following:
       •   The first section outlines the overall performance of China in terms of technology generation (patent
           applications), trade and venture capital data.
       •   The second section dives into the Chinese ecosystem in the field of Artificial Intelligence and Big
           Data.
       •   The third section presents the Chinese Advanced Manufacturing and Robotics ecosystem.
       •   The last section analyses the impact of and economic responses to the COVID-19 pandemic.

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Advanced Technologies - for Industry - international reports Advanced technology landscape and related policies in China
ATI international report on China

Section 1

        1                 Overall performance in advanced technologies

        1.1               Patent applications                                                                                                                                  Figure 2: Trends in the share in global transnational
                                                                                                                                                                               patent applications in China (2008-2018)
        Over the past decade the technological
        performance of China has improved rapidly. An
        analysis    of   China's  share    in  worldwide                                                                                                                                                                 30%                                             Technology
        transnational patent applications helps to assess
                                                                                                                                                                                                                                                                           AI
                                                                                                                                                                                                                                                                           Robotics
        and benchmark its technological performance.                                                                                                                                                                     25%                                               MNE
        Figure 1 provides an overview of the Chinese

                                                                                                                                                                                   Share of global patent applications
                                                                                                                                                                                                                                                                           Photonics
        share    of    worldwide   transnational   patent                                                                                                                                                                                                                  Security
        applications in advanced technologies compared                                                                                                                                                                   20%                                               Big Data

        to that of the EU27's Member States in 20181.
                                                                                                                                                                                                                                                                           IT for Mobility
                                                                                                                                                                                                                                                                           Adv. Manufact.
        Figure             1:    Share in global transnational patent                                                                                                                                                    15%                                               IoT

                                applications in advanced technologies                                                                                                                                                                                                      Ind Biotech

                                (2018)                                                                                                                                                                                                                                     Nanotech
                                                                                                                                                                                                                         10%                                               Adv. Materials
                    30%

                    20%                                                                                                                                                                                                  5%
            China

                    10%
                                                                                                                                                                                                                         0%
                                                                                                                                                                                                                               2008   2010   2012   2014   2016   2018
                    0%
                    30%                                                                                                                                                                                                                         Year

                                                                                                                                                                               Source: Fraunhofer ISI, based on EPO PATSTAT
            EU27

                    20%

                                                                                                                                                                               The analysis of China's technological specialisation
                                                                                                                                                                               (RPA-index2)     as   visualised   in   Figure     3
                    10%

                    0%                                                                                                                                                         demonstrates China's relative focus of activity in
                                                                                                                                                                               all twelve advanced technologies, compared to
                           AI

                                Robotics

                                           MN Electronics

                                                            Photonics

                                                                        Security

                                                                                   Big Data

                                                                                              IT for Mobility

                                                                                                                Adv Manufact.

                                                                                                                                IoT

                                                                                                                                      Ind Biotech

                                                                                                                                                    Nanotech

                                                                                                                                                               Adv Materials

                                                                                                                                                                               that of the EU27.
                                                                                                                                                                               The findings of the analysis confirm China's
                                                                                                                                                                               technological focus on information technologies
                                                                                                                                                                               (see also Figure 1) with outstanding specialisation
                                                                                                                                                                               in Robotics and Artificial Intelligence as well as -
        Source: Fraunhofer ISI, based on EPO PATSTAT                                                                                                                           to a lesser extent - Micro- and nanoelectronics.
                                                                                                                                                                               The EU27, in contrast, displays a negative
        As seen in Figure 1, the EU27 continues to hold a                                                                                                                      specialisation in all four of these fields.
        higher share of global patent applications than
        China in many advanced technologies. However,
        China is not far from catching up with Europe in
        Photonics, Security and has done so in the
        advanced technology of Big Data already.
        Moreover, China's share in global patenting now
        clearly exceeds that of Europe in Micro- and
        nanoelectronics (MNE), Robotics, as well as
        Artificial Intelligence.
        Patenting trends over time show the force of
        Chinese technology and its increasing dominance
        on the global patent landscape. Over the period
        from 2008 to 2018 patent applications filed by
        Chinese applicants increased most in Artificial
        Intelligence (see Figure 2).

        1
          The patent analysis reflects the owner (applicant) of the                                                                                                            2
                                                                                                                                                                                 The RPA-Index illustrates the relative specialisation on a scale
        technology, since patents have been localised based on the                                                                                                             from -100 to +100, putting the share of a specific field in national
        location of their legal owner.                                                                                                                                         applications in relation to the global average share.

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       Figure 3: Technological specialisation RPA-index of                                                                                                                           China exports more goods related to advanced
                  China and EU27 (2018)                                                                                                                                              technologies for industry than the European Union
                                                                                                                                                                                     in all fields - except for Advanced Manufacturing

                                                                                                              Adv. Manufact.
                                       MN Electronics

                                                                                                                                                                Adv. Materials
                                                                                            IT for Mobility
                                                                                                                                                                                     technologies.

                                                                                                                                     Ind Biotech
                                                         Photonics

                                                                                                                                                   Nanotech
                                                                                                                                                                                     Figure 5 visualises the trade balance3 in relation to
                            Robotics

                                                                                Big Data
                                                                     Security
                                                                                                                                                                                     the total trade volume of China and the EU27

                                                                                                                               IoT
                                                                                                                                                                                     countries in 2018.
                       AI

                40
                                                                                                                                                                                     Figure 5: Trade balance in relation to overall trade
                                                                                                                                                                                                volume (exports - imports) (2018)
                20

                                                                                                                                                                                                                                                                                                               MN Electronics
                                                                                                                                                                                                                                                                                                                                Adv Manufact.
                                                                                                                                                                                                                                                           IT for Mobility
                                                                                                                                                                                                                     Adv Materials
                                                                                                                                                                                            Ind Biotech
                 0

                                                                                                                                                                                                                                                                             Photonics
                                                                                                                                                                                                          Nanotech

                                                                                                                                                                                                                                                                                                    Robotics
                                                                                                                                                                                                                                                Big Data
           %

                                                                                                                                                                                                                                                                                         Security
                -20

                                                                                                                                                                                                                                     IoT
                                                                                                                                                                                                                                           AI
                -40
                                                                                                                                                                                     80%

                -60                                                                                                                                                                  60%

       Colour legend                                                                                                                                                                 40%
               China
               EU27                                                                                                                                                                  20%

       Source: Fraunhofer ISI, based on EPO PATSTAT                                                                                                                                   0%

       1.2             International competitiveness                                                                                                                                 -20%

       Trade measures are a common indicator of global                                                                                                                               -40%
       competitiveness,     as   they    document    the
       attractiveness of a country's products beyond the                                                                                                                             -60%

       home market. Total exports provide evidence                                                                                                                                   -80%

       about a country's role as a producer, and trade                                                                                                                               Colour legend
       balance captures its sovereignty in certain areas                                                                                                                               China
       of production.                                                                                                                                                                  EU27 extra

       Figure 4: Export share in world total (2018)                                                                                                                                  Source: Fraunhofer ISI, based on UN COMTRADE
                                                                                                                                                                                     Note: ‘EU27-extra’ refers to exports to non-EU countries,
               Nanotechnology                                                                                                                                                        i.e. competitiveness-based exports outside the single market
                   Ind Biotech
                            AI                                                                                                                                                       China displayed a large relative trade surplus in
                           IoT                                                                                                                                                       2018 in goods related to Industrial Biotechnology,
                 Adv Materials                                                                                                                                                       Nanotechnology, Advanced Materials and the
                     Photonics                                                                                                                                                       Internet of Things. The analysis shows, however,
                      BigData                                                                                                                                                        a rather notable trade deficit in terms of total trade
                      Mobility                                                                                                                                                       volume in Micro and nanoelectronics (over 60%),
                      Security                                                                                                                                                       Advanced Manufacturing, Security and Robotics.
                      Robotics                                                                                                                                                       The European Union had significant relative trade
                          MNE                                                                                                                                                        deficits almost in all fields related to advanced
                Adv Manufact.                                                                                                                                                        technologies - with the exception of Advanced
                                                        0%           5%                    10%                      15%              20%                      25%                    Manufacturing technology.
                                                                                                                                                                                     1.3             Startup and scaleup activity
       Colour legend                                                                                                                                                                 Figure 6 analyses private and venture capital (VC)
          China                                                                                                                                                                      investments in advanced technologies in China. It
               EU27                                                                                                                                                                  illustrates the number of investment deals
                                                                                                                                                                                     concluded in 2020 in advanced technologies as
       Source : Fraunhofer ISI, based on UN COMTRADE
       Note: ‘EU27-extra’ refers to exports to non-EU countries,
                                                                                                                                                                                     well as the number of active startups4 in 2020 in
       i.e. competitiveness-based exports outside the single market                                                                                                                  China based on Crunchbase5 data.
       The view is filtered on China, the export shares of which range
       from 4.3 (AMT) to 25.8% (Nanotechnology)                                                                                                                                      The analysis suggests that the number of funding
                                                                                                                                                                                     rounds was the highest in Biotechnology followed
       Figure 4 displays the share of global technological                                                                                                                           by   Artificial  Intelligence   and   Advanced
       exports in 2018. It clearly demonstrates that

       3
         Exports - Imports                                                                                                                                                           merged dataset available in Crunchbase and Dealroom.
       4
         Startups have been defined as companies founded after 2015.                                                                                                                 Crunchbase provides information on venture capital backed
       5
          Private equity, venture capital investment and related                                                                                                                     innovative companies.
       innovative start-up creation have been explored based on a

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       Manufacturing in China in 2020. Startups have       Figure 6: The number of funding rounds in advanced
       been most active in the area of AI and Advanced     technologies and startups, China (2020)
       Manufacturing, although 2020 has not seen many            Biotechnology
       newly founded startups except for AI (as captured                     AI
       by the LinkedIn database). The data suggest that      Adv Manufacturing
       investors focused on ventures already well                      Robotics
       established and had a relatively high average                       MNE
       investment amount per company.                                  Big Data
                                                              Cloud technology
                                                                       Mobility
                                                                            IoT
                                                                     Blockchain
                                                                  Cybersecurity
                                                                      Photonics
                                                                         AR/VR
                                                               Nanotechnology
                                                                 Adv Materials
                                                                                  0            50          100      0        200      400      600

                                                                                      Number of funding rounds in       Number of startups active in
                                                                                                 2020                              2020

                                                           Source: Technopolis Group based on Crunchbase

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Section 2

       2 Analysis of selected technology ecosystems: Artificial
         Intelligence and Big Data

       2.1       Major players
       Table 1: Major government stakeholders in China’s AI and Big Data development

           Scope                Name and resulting organisations/initiatives, if applicable

           Ministries           Ministry of Science and Technology (MOST)
                                 -   New Generation AI Strategy Advisory Committee
                                 -   National New Generation AI Governance Expert Committee
                                National Development and Reform Commission (NDRC)
                                Ministry of Industry and Information Technology (MIIT)
                                 -   China Academy of Information and Communications Technology (CAICT)
           Other                Shenzhen Research Institute of Big Data (SRIBD)
           institutional
           players

           Authorities for      Chinese National Intellectual Property Administration (CNIPA)
           regulation and       Standardisation Administration of China (SAC)
           Intellectual          -   National Artificial Intelligence Standardisation General Working Group
           Property Rights       -   National Artificial Intelligence Standardisation Expert Advisory Group
                                China Electronics Standardisation Institute (CESI)
       Source: authors.

       Ministries                                                   nationwide science and technology development,
                                                                    support scientific research, and develop science
       In China, various state organisations as well as
                                                                    parks.7 The MOST has approved eleven pilot zones
       institutions are engaged in the development of
                                                                    for innovative AI development, e.g. Beijing,
       strategies and initiatives in the field of Artificial
                                                                    Shanghai and Shenzhen, to develop local versions
       Intelligence (AI) and Big Data. Alongside the
                                                                    of the governance principles and regulations for
       highest executive body of the Chinese state
                                                                    AI.8 At least two committees closely related to AI
       administration, the State Council, headed by
                                                                    have been established within the MOST.
       Premier Li Keqiang, subordinate ministries are also
       actively involved. The MOST, the NDRC and the                The New Generation AI Strategy Advisory
       MIIT in particular appear to play leading roles for          Committee was founded in 2017 and aims at
       AI and Big Data. For example, the State Council,             providing input to the Chinese government on AI-
       which is responsible for implementing the                    related science and technology development plans
       principles and policies of the Communist Party of            as well as relevant projects.9 Another committee
       China as well as the regulations and laws passed             related to AI, the National New Generation AI
       by the National People's Congress launched the               Governance Expert Committee, was established
       mega-project called ‘New Generation of AI                    by the MOST in 2019, and announced eight
       Development Plan’ as well as the ‘Outline for                principles for the governance of AI in 2020 to
       Actions to Promote Big Data Development’.6                   ‘develop responsible AI’. These principles
                                                                    emphasise that AI developments should be driven
       The Ministry of Science and Technology (MOST)
                                                                    by the goal of improving the general well-being of
       was originally established in 1959 as the National
                                                                    humanity. Accordingly, human rights, privacy and
       Science Council but was reorganised and renamed
                                                                    fairness are emphasised as well as the relevance
       in 2014. The ministry, which is directly
                                                                    of transparency, collaboration and agility in
       subordinate to the State Council, frames
                                                                    dealing with new risks.10 11
       guidelines and policies in addition to setting out
       the vision and strategies for China's national               Originally established in 1952 as the State
       economic and technological development. The                  Planning Commission, the agency was reorganised
       three main tasks of the ministry are to promote              and has been operating as the National

       6
           People's Daily Online 2006.                              9
                                                                        Murphy 2020a.
       7
           MOST 2020.                                               10
                                                                        Roberts et al. 2020.
       8
           Jia 2020.                                                11
                                                                        chinainnovationfunding.eu 2020.

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ATI international report on China

       Development and Reform Commission (NDRC)                           innovation centres are part of the CAICT, including
       since 2003.12 The NDRC is directly subordinate to                  the New Generation AI Institute in Nanjing, the 5G
       the State Council and is responsible for the                       and AI Research Centre in Hangzhou and the
       formulation and implementation of strategies as                    Central Big Data Research Innovation Centre in
       well as annual and development plans for national                  Zhengzhou.22 The ‘Cloud Computing and Big Data
       economic and social development. It submits                        Research Institute’, which was established in
       these development plans to the National People's                   2017, is one of the core business departments of
       Congress on behalf of the State Council.13 In the                  the CAICT. It deals with the emerging
       field of Big Data and AI, the NDRC published a list                technologies, business models and industries of
       of selected projects in 2017, the 'List of 2018                    the internet. The institute conducts research in the
       Internet+, AI and Digital Economy Experiments                      areas of Big Data and AI, builds various platforms,
       Major Projects Recipients'. It features projects in                and tests and evaluates various products and
       the field of natural language processing and health                services. In addition, scientific projects are carried
       data exchange, for example. A study estimates                      out on a national level as well as with industry
       the role of the companies awarded by the NDRC                      partners.23
       to be substantial for both Big Data and AI in
                                                                          Other institutional players
       China.14 Additionally, the NDRC leads the
       development of China’s national Five-Year                          Although there are certainly other institutions
       Plans.1516                                                         relevant to AI and Big Data developments in
                                                                          China, the SRIBD stands out in particular.
       Another influential player for Big Data and AI in
       China is the Ministry of Industry and Information                  In 2016, the government of Shenzhen established
       Technology (MIIT). Established in 2008 as a                        the Shenzhen Research Institute of Big Data
       department under the State Council, it is                          (SRIBD). The institute is designed to lead and
       responsible for managing the industrial sectors                    coordinate the research and development of Big
       and information technology industry in China and                   Data innovations and focuses on basic theories,
       is considered ‘the nation’s top industry                           novel computing systems of the future, and
       regulator’.17 The State Council lists the following                intelligent application technologies in the field of
       matters among the main tasks of MIIT:                              Big Data. Its vision is to become a globally
       determining China's industrial planning, policies                  recognised research institute in the field of Big
       and standards; supervising the daily operation of                  Data with its own Intellectual Property rights and
       industries; promoting the development of large-                    outstanding core technologies.24
       scale technological equipment and innovations in
       communications; leading the construction of                        Authorities for regulation and IPR
       information systems; and ensuring China's
                                                                          With a view to intellectual property rights (IPR)
       information security.18 Given its responsibilities,
                                                                          and standards in China's AI and Big Data agenda,
       the MIIT has initiated various plans and strategies
                                                                          key responsibilities rest with the CNIPA and,
       in the field of AI and Big Data, including the 'Big
                                                                          regarding standards, the SAC and the CESI.
       Data Industry Development Plan' and the 'Three-
       Year Action Plan for Promoting Development of a                    The Chinese National Intellectual Property
       New Generation AI Industry'.                                       Administration (CNIPA), which is responsible for
                                                                          the organisation and coordination of the protection
       Founded in 1957, the - China       Academy      of
                                                                          of IPR in China25, amended the guidelines for
       Information and Communications Technology
                                                                          patent     examination.    They     now     include
       (CAICT) is a subordinate institute to the MIIT19,
                                                                          examination rules for claims characterised by
       and plays an important role in telecommunications
                                                                          algorithmic features, with a particular focus on
       and the internet. It acts as a ‘specialised think-
                                                                          emerging technologies, including Big Data and AI,
       tank for the government’ as well as an ‘innovation
                                                                          for which new standards are defined. The revised
       and development platform for the industry’.20
                                                                          rules have been in force since February 2020. For
       Emerging technology issues on the agenda include
                                                                          AI, only inventions created with the help of AI can
       AI, Big Data, 4G/5G, Cloud Computing, etc. The
                                                                          currently be patented, while inventions developed
       CAICT supports the development of policies,
                                                                          independently of AI are not permitted, as
       including industry plans (such as the Big Data
       Industry Development Plan), develops standards
       and certification, and conducts a variety of
       technology and industry studies.21 A variety of

       12
          United Nations Economic and Social Commission for Asia and      18
                                                                             State Council 2014.
       the Pacific 2012.                                                  19
                                                                              The MIIT operates at the same level as the MOST and is
       13
          National Development and Reform Commission 2008a.               subordinate to the State Council in China.
       14
          Grossman et al. 2020.                                           20
                                                                             CAICT 2020.
       15
           China’s Five-Year Plans are the most important guiding         21
                                                                             Jiang 2018.
       documents for the economic and social policy direction of China,   22
                                                                             CAICT 2020.
       and have been developed since 1953.                                23
                                                                             CAICT 2020.
       16
          Haacke 2014.                                                    24
                                                                             Shenzhen Research Institute of Big Data 2020.
       17
          Si 2019.                                                        25
                                                                             US-China Business Council 2018.

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       standards for their examination have yet to be                   2020, the SAC announced the establishment of an
       established.26 27                                                AI sub-technical committee (SAC/TC 28/SC 42),
                                                                        mainly reponsible for the development and
       The General Administration of Quality Supervision,
                                                                        revision of national standards in AI.31 32
       Inspection and Quarantine (AQSIQ), a ministerial
       administrative body directly under the State                     In addition to the technical committees, China has
       Council, is responsible for the standards system in              established organisational mechanisms aimed at
       China. In turn, the AQSIQ heads the Certification                the overall coordination of measures for AI-
       and Accreditation Administration of China (CNCA)                 standardisation. For this purpose, the SAC
       as well as the Standardisation Administration of                 approved two groups in 2018: The National AI
       China (SAC).28 The latter represents China in                    Standardisation General Working Group, which is
       various standardisation organisations at national                responsible for the coordination, planning and
       and international level, including the International             layout of a variety of AI standardisation work in
       Organisation for Standardisation (ISO) and the                   China. Its office is located at CESI. Additionally,
       International Electrotechnical Commission (IEC).29               the National AI Standardisation Expert Advisory
                                                                        Group was established, which is an expert group
       Another      important      responsibility      for
                                                                        of AI-experts and scientists, responsible for advice
       standardisation in AI and Big Data lies with the
                                                                        related to AI standards. The expert group leads
       China   Electronics    Standardisation    Institute
                                                                        the work of the National AI Standardisation
       (CESI), a think-tank subordinate to the MIIT,
                                                                        General Working Group.33
       which is specifically responsible for the
       standardisation of the IT and electronics industry               Major business actors
       in China. CESI manages a number of China’s
                                                                        China is home to a number of globally leading AI
       counterparts to IEC and ISO Technical Committees
                                                                        and Big Data companies. Next to the ‘big four’,
       and Subcommittees. The National Information
                                                                        Baidu, Alibaba, Tencent (collectively referred to as
       Technology      Standardisation      Technological
                                                                        ‘BAT’34 35) and Alibaba, some interesting start-ups
       Committee (SAC/TC 28) is responsible for
                                                                        show a strong track record. Table 2 shows the
       developing AI-standards in China. It is considered
                                                                        major companies in China’s AI and Big Data
       the counterpart to the ISO/IEC Joint Technological
                                                                        landscape.
       Committee One. SAC/TC 28 also includes a
       working group on Big Data standards.30 In April
       Table 2: Selected list of major Chinese business actors in AI and Big Data

           Company Name                  Company Information

           Tencent         Holdings      -   Established in 1998
           Ltd.36                        -   Headquarters: Shenzhen, Guangdong province
                                         -   Leadership in speech and image recognition due to Big Data developed in its
                                             social network; expansions also into medical Research & Development (R&D)
                                             through image recognition and analysis
                                         -   Focus: digital communication and social platforms, advertising, financial
                                             technologies and business services
           iFlyTek Co., Ltd.37           -   Established in 1999
                                         -   Partially state-owned
                                         -   Headquarters: Hefei, Anhui province
                                         -   Focus: intelligent speech and AI; including research in speech and languages,
                                             natural language understanding, machine learning, machine reasoning,
                                             adaptive learning
           Baidu Co., Ltd.38             -   Established in 2000
                                         -   Headquarters: Beijing, Hebei province
                                         -   Analogous to Google
                                         -   New Big Data and AI developments: ‘Baidu Cloud’ produces, analyses and tags
                                             data; the algorithm platform ‘Baidu Brain’ is open to internal use as well as
                                             third parties
                                         -   Focus: platforms connect users to information and services via various
                                             channels; online marketing
           Alibaba Group Holding         -   Established in 2007
           Ltd.39                        -   Headquarters: Hangzhou, Zhejiang province

       26
            Wei 2020.                                                   33
                                                                             China Electronics Standardization Institute 2020a.
       27
            Quan 2020.                                                  34
                                                                             Jing and Dai 2017.
       28
            China Electronics Standardization Institute 2020a.          35
                                                                             Jia et al. 2018.
       29
            International Organization for Standardization 2020.        36
                                                                             Tencent 2020.
       30
            China Electronics Standardization Institute 2020a.          37
                                                                             iFlyTek 2020.
       31
            China Electronics Standardization Institute 2020b.          38
                                                                             Baidu 2020.
       32
            China Electronics Standardization Institute 2020a.          39
                                                                             Alibaba Group 2020.

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           Company Name              Company Information

                                     -   AI strategy based on research of the Institute of Data Science and Technologies
                                         (iDST): ‘ET Brain’ platform available to companies to apply AI practically; AI
                                         labs; AI in order to improve Alibaba’s e-commerce and payment service
                                     -   Focus: e-commerce, cloud computing, digital media and entertainment,
                                         innovation initiatives, payment services and financial services
           Startups
           Megvii      Technology    -   Established in 2011
           Ltd.40                    -   Headquarters: Beijing
                                     -   Large research focus; operator of the world's biggest computer vision research
                                         institute
                                     -   Focus: core competence deep learning with a focus on the integration of AI
                                         and IoT for people, cities and supply chains
           SenseTime        Group    -   Established in 2014
           Ltd.41 42                 -   Headquarters: Hong Kong
                                     -   World’s most valuable AI startup
                                     -   Various technological breakthroughs, including the development of the first AI
                                         system to achieve better detection accuracy than the human eye
                                     -   Focus: development of AI technologies, provider of AI algorithms
           iCarbonX Co., Ltd.43      -   Established in 2015
                                     -   Headquarters: Shenzhen, Guangdong province
                                     -   Tencent led iCarbonX series A financing
                                     -   Platform that combines biological measures with experiential data from people
                                         worldwide and mines it for signals of disease, health, ageing based on
                                         advanced AI
                                     -   Focus: AI-based healthcare platform
           CloudWalk                 -   Established in 2015
           Technology Co., Ltd.44    -   Headquarters: Guangzhou, Guangdong province
           45
                                     -   Listed on the US Entity List due to US claims of complicity in human rights
                                         violations and abuses, restricting its access to US technology.
                                     -   Focus: Integration of multidimensional recognition (visuality, language,
                                         environment), to create an intelligent decision-making system and realise the
                                         closed loop of AI technology.
       Source: authors.

       2.2       Underlying conditions                              constantly generated data. Access to this available
                                                                    data is considered one of the enablers for China's
       Looking at the general conditions for the
                                                                    future leadership in AI.
       development of AI and Big Data in China, three
       aspects stand out as being of special relevance:             Protection and regulation
       the availability of data, protection and regulation,
                                                                    For a long time, China did not have any law
       and regional development areas.
                                                                    ensuring basic data processing principles. The
       Availability of data                                         Chinese data protection system was mainly
                                                                    criticised for a lack of definitions, the non-
       Over time, a digital ecosystem for Chinese tech
                                                                    existence of the concept of individual consent, the
       companies has developed in a partially protected
                                                                    absence of references to the rights of information,
       market with a large number of internet users.
                                                                    access and rectification, and the lack of a
       China has the largest number of internet users
                                                                    supervisory authority.46
       worldwide. In June 2020, over 939 million citizens
       were connected to the internet, while more than              The 'Cyber Security Law' has been in force since
       932 million used mobile internet. As the number              July 2017 to protect critical infrastructures and
       of internet users increases, those connected make            data from unauthorised access. It sets out rules
       extensive use of digital technologies and mobile             for the protection of IT infrastructures and
       access, using the internet for a variety of reasons          systems, data management for public services as
       e.g. for payment, travel or communication.                   well as compliance by economic and social actors.
       Consequently, China has huge amounts of                      Due to the barriers caused by strict cyber and data

       40
            Megvii 2020.
       41
            SenseTime 2020.
       42
            Marr 2019.
       43
            iCarbonX 2020.
       44
            CloudWalk 2020.
       45
            U.S. Department of Commerce 2020.
       46
            Hert and Papakonstantinou 2015.

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       security regulations, foreign companies' access to                 To drive the development of AI in China, in
       China's digital and telecommunication markets                      addition to national level efforts, China's
       remains limited.47 Another step towards the                        government is also reaching out to individual
       protection of personal information by law was                      provinces, cities and municipalities in order to
       unveiled in October 2020, with the draft of a                      promote the AI industry at the local level.57 As of
       'Personal Information Protection Law' (PIPL). 48                   March 2020, a total of eleven ‘AI Pilot Zones’ had
       The PIPL is considered to have similarities to the                 been publicly announced and established by the
       European Union's data protection law (General                      MOST in Beijing, Shanghai, Hangzhou, Hefei,
       Data Protection Regulation).49                                     Shenzhen, Tianjin, Deqing County, Chengdu,
                                                                          Chongqing, Jinan and Xi’an.58 As part of this effort,
       A nationwide 'Social Credit System' (SoCs) is
                                                                          the provinces and municipalities have developed
       expected to become mandatory, which will
                                                                          AI plans, which set their individual, local targets.
       monitor companies, organisations and individuals
                                                                          Beijing, Shanghai and Shenzhen, in particular,
       through a big-data-based control mechanism and
                                                                          stand out as tech hubs and are home to some of
       thus enforce compliant and conformist behaviour.
                                                                          China's largest digital pioneers (e.g. Baidu and
       The SoCs has been in planning since 2014, it was
                                                                          Tencent). By 2020, Shanghai's plan aims to
       piloted in many programmes and its main
                                                                          generate a core AI industry of ¥100 bn
       framework and mechanisms were established in
                                                                          (€12.81 bn59). To achieve this, AI industrial zones
       2020. It is seen as a powerful instrument of
                                                                          and agreements between leading AI companies
       control over companies and people with the help
                                                                          have been established in several parts of the city.
       of digital technologies.50 51
                                                                          In Beijing, the AI hub Zhongguancun stands out
       Pilot zones for innovative development                             and, in response to Shanghai's developments, a
                                                                          new AI industry park was announced in 2018. In
       Guiyang City (in Guizhou province) has proactively                 addition to these prominent AI locations, Hefei is
       promoted the integration of AI in its economy                      also a solid hub for AI development, with the AI
       since 2014. In 2017, the city set itself a series of               base 'China Speech Valley' providing a strong
       goals to be achieved by 2020 in order to become                    centre for speech recognition technologies in
       China’s ‘Big Data Valley’: reach the capacity to                   China. Beyond that, China’s more reserved
       store one exabyte of data, attract more than                       provinces, such as Liaoning, also have ambitious
       10 000 Big Data companies and over 100 000 Big                     AI plans to join the regional AI developments.60
       Data experts, and generate over ¥100 bn
       (€12.81 bn52) through Big Data companies. The                      China also places a special focus on attracting AI
       first funding round was projected to reach ¥10bn                   talent and companies. For example, an article by
       (€1.28 bn53). To promote these ambitious plans,                    the Mercator Institute for China Studies (MERICS)
       28 scientific research organisations and 23                        61 mentions rewards offered to research
       incubators as well as investment agencies have                     institutions and companies for AI professionals
       been set up in the field of Big Data in the Guizhou                settling in specific regions, or initiatives for
       province.54 55 Since then, Guiyang has undergone                   recruiting AI professionals from abroad. A map
       rapid development and is respected worldwide,                      prepared by MERICS illustrates the provincial and
       which     has    attracted    several    offices  of               municipal plans for AI development in China (see
       internationally leading companies such as Alibaba,                 Figure 7).
       Tencent, Apple and Intel to the city.56

       47
          Shi-Kupfer and Ohlberg 2019.                                    54
                                                                             China Daily 2017.
       48
          Holzmann and Meinhardt 2020.                                    55
                                                                             Guiyang Government 2020.
       49
          Zhang and Chen.                                                 56
                                                                             Shenggao 2019.
       50
          Shi-Kupfer and Ohlberg 2019.                                    57
                                                                             Ives and Holzmann 2018.
       51
          Sutherland 2020.                                                58
                                                                             Center for Security and Emerging Technology 2020.
       52
          The amount in euro was calculated based on the ECB’s official   59
                                                                             The amount in euro was calculated based on the ECB’s official
       euro foreign exchange reference rates for 2017.                    euro foreign exchange reference rates for 2020.
       53
          The amount in euro was calculated based on the ECB’s official   60
                                                                             Ives and Holzmann 2018.
       euro foreign exchange reference rates for 2017.                    61
                                                                             Ives and Holzmann 2018.

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       Figure 7: Provincial and municipal plans for AI development in China

       Source: Ives and Holzmann, 2018.

       2.3     Policies, strategies and initiatives                       Governance    Principles   for   the   New
                                                                          Generation AI - developing responsible AI
       In line with its general industrial policy, China is
       pursuing a top-down approach to promote the                        The MIIT published ‘Governance Principles for the
       development of AI and Big Data in the country by                   New Generation AI’ in 2019, which were
       investing lots of capital in the relevant areas,                   formulated     by     the   National   Governance
       devoting a lot of human resources to them and                      Committee for the New Generation AI. This was
       setting other incentives.62 A variety of city-level                triggered by global AI developments that have a
       funds for AI and Big Data were identified.                         profound impact on daily life, possess new
                                                                          capabilities and will bring about major changes in
       Shanghai AI Investment Fund
                                                                          the future. The document lists eight principles,
       In 2019, Shanghai launched its AI Investment                       which are addressed to all actors involved in AI
       Fund to support the city’s transformation into an                  development:65
       innovative AI ecosystem by 2021. This city-level
                                                                               1.   Harmony and human-friendly
       fund is managed by a group of government-led
                                                                               2.   Fairness and justice
       firms as well as private equity enterprises, has
                                                                               3.   Inclusion and sharing
       initial funds of ¥10 bn (€1.28 bn63) and plans to
                                                                               4.   Respect for privacy
       increase this to ¥100 bn (€12.79 bn63). Four AI
                                                                               5.   Safety and controllability
       institutes were introduced at the ceremony,
                                                                               6.   Shared responsibility
       including the Shanghai AI Smart Algorithm
                                                                               7.   Open and collaboration
       Institute. A guide to Shanghai's AI development
                                                                               8.   Agile governance
       revealed plans to start 10 AI-labs between
       scientific institutions and firms, establish 15 Big                Action  Plan   to  Promote                     Big     Data
       Data labs and turn Shanghai into an AI chip                        Development (2015)
       hotspot. Shanghai also aims to double its AI talent
                                                                          To launch the ‘startup-phase’ for the national Big
       pool within three years to 200 000 workers. In
                                                                          Data strategy development in China, the State
       addition to loans guaranteed by major banks to
                                                                          Council issued an ‘Outline for Actions to Promote
       support capital, the municipality subsidises
                                                                          Big Data Development’ in 2015.66 The call aimed
       important AI application solutions. 64
                                                                          to foster the development and adoption of Big
                                                                          Data, both for economic restructuring and to
                                                                          advance governance. This was triggered by the
                                                                          recognition of China's rich data resources, which

       62
          Ives and Holzmann 2018.                                         65
                                                                            China Daily 2019.
       63
          The amount in euro was calculated based on the ECB’s official   66
                                                                             China Academy      of   Information   and   Communications
       euro foreign exchange reference rates for 2019.                    Technology 2019.
       64
          Wei 2019.

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       harbour potential benefits for competitive                     Table 3: Major projects for China’s AI and Big Data
       advantage, economic growth and governance.                     development
       However, Big Data developments remained                         Project                            Year
       hesitant due to a weak industrial foundation, the               Made in China 2025 (MIC            2015-ongoing
       lack of openness and the absence of a long-term                 2025)
       strategy. In this outline, the State Council also               Internet Plus                      2015-ongoing
       announced the development of a new model of                     Three-Year Guidance for            2016-2018
       social governance and the formulation of                        Internet       Plus       AI
       regulations to ensure social access to public data              Development
       via an open platform. Moreover, the government                  Big       Data      Industry       2016-2020
       is pushing for the integration of Big Data into new             Development Plan
       generation information technologies (e.g. Cloud                 Three-Year Action Plan for         2018-2020
       Computing).67                                                   Promoting Development of a
                                                                       New Generation AI Industry
       Guidance on Developing Industrial Big Data                      New    Generation    of   AI       2020-ongoing
       In 2019, the MIIT released a ‘Guidance on                       Development Plan
       Developing Industrial Big Data’ as a draft to solicit          Source: authors.
       opinions. This focuses on four areas of data:
       resources, analysis, industry and governance, and              Internet Plus
       aims to establish high-quality manufacturing and               Proposed in 2015, the grand action plan 'Internet
       a data-driven manufacturing sector in China by                 Plus' aims at the comprehensive digitalisation of
       strengthening the link between manufacturing and               the economy and society beyond the conventional
       the internet, AI, Big Data and the industrial                  internet, which is to be integrated into various
       internet. It conveys two highly significant                    areas such as e-commerce, education and
       messages: first, industrial Big Data is considered             manufacturing. Big Data is one of the relevant
       a factor of production and thus an economic                    technologies promoted by Internet Plus. As part of
       resource, reinforcing developments to determine                this bottom-up initiative, internet companies are
       data ownership, market transaction mechanisms                  closely integrated in the development of
       as well as valuations of data assets. Second,                  implementation guidelines. On the government
       legislation on data governance is anticipated,                 side, the NDRC is responsible for the plan.70 71
       underpinning improvements in legal issues around
       security, ownership and sharing of data. The                   Both MIC 2025 and Internet Plus were launched in
       timeline extends until 2025.68                                 2015 with the purpose of driving industrial and
                                                                      digital innovation within China.72
       2.3.1    Major projects
                                                                      Three-Year Guidance for Internet Plus AI
       In addition to the initiatives, small projects and             Development
       funds presented above, several large-scale
       projects exist in China that contribute significantly          In 2016, the Chinese government published the
       to the development of AI and Big Data. Table 3                 ‘Three-Year Guidance for the Development of the
       lists these projects.                                          Internet Plus AI’. According to this plan, China
                                                                      aims to develop new AI industries, for example in
       MIC 2025                                                       core technology research. In addition, the
       MIC 2025 is a strategic masterplan of the Chinese              statement emphasises that projects relevant to AI
       government with the main goal of upgrading                     innovations (e.g. smart vehicles or houses) will be
       Chinese industry in a relatively short period of               promoted, and the development and application of
       time and developing it into a global high-tech                 smart wearable devices as well as robots will be
       superpower. The plan therefore targets key high-               pushed.73 Led by the MIIT, the plan focuses on
       tech industries and technologies that make a                   four aspects 74:
       significant contribution to economic growth but at                    -    AI-hardware skills
       present are largely dominated by foreign                              -    Powerful platform-ecosystems
       companies in China. AI and Big Data play a                            -    AI-applications in major socio-economic
       significant role among these technologies. AI is                           fields
       defined as one of the core technologies being                         -    Societal impact of AI
       pushed by the government and there is also a
       strong focus on Big Data, with many industrial
       parks being established in China.69

       67
          State Council 2015b.                                        71
                                                                           China Daily 2015.
       68
           Deutsche Gesellschaft für Internationale Zusammenarbeit    72
                                                                           Shi-Kupfer and Ohlberg 2019.
       (GIZ) GmbH 2020.                                               73
                                                                           State Council 2016.
       69
          Zenglein and Holzmann 2019.                                 74
                                                                           OECD 2020b.
       70
          Wübbeke et al. 2016, p. 20.

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       Big Data Industry Development Plan                                  conditions.84 It is set to seize the great strategic
                                                                           opportunities of AI developments, further expand
       The Big Data Industry Development Plan was
                                                                           China's AI advantage as a first mover, and
       officially issued by the MIIT at the end of 2016,
                                                                           accelerate the establishment of China as an
       marking an important phase of China’s national
                                                                           innovative and globally advanced country in
       Big Data strategy.75 76 It was introduced as part of
                                                                           science and technology.85
       the 13th Five-Year Plan with the overall goal of
       developing Big Data into a key strategic resource                   Four strategic goals are presented, aimed at
       in China. China’s draft of the 13th Five-Year Plan                  making China a global AI leader by 203086:
       describes this plan for the development of Big
                                                                                 -    China evolves as a centre for basic AI
       Data, which is intended to speed up the openness,
                                                                                      research and the development of AI
       sharing, development and application of data
                                                                                      theories.
       resources. Big Data will thus support the
                                                                                 -    China leads applied research and
       transformation and improvement of industries and
                                                                                      development of innovative AI products
       innovate social governance.77 This comprehensive
                                                                                      and services.
       Big Data strategy is considered a major step
                                                                                 -    China creates a domestic AI industry and
       towards the development of a Big Data industry in
                                                                                      leads global AI markets.
       China.78
                                                                                 -    China utilises AI to improve the efficiency
       Three-Year Action Plan for Promoting the                                       of traditional sectors and to move up the
       Development of a New Generation AI                                             global value chain.
       Industry
                                                                           2.4       Lessons for Europe
       In 2017, the MIIT issued an action plan focused on
                                                                           Compared to the European Union (EU), the
       integrating AI into manufacturing. This plan
                                                                           analysis of China's AI and Big Data landscape
       supports the implementation of MIC 2025 and the
                                                                           reveals a number of points of lessons the EU can
       Next Generation AI Development Plan. Four
                                                                           learn from.
       initiatives are identified for 202079 80:
                                                                           Number one is that Europe needs to
            -    Ensure developments and the integration
                                                                           ascertain a broad availability of data to train
                 of key intelligent AI-products in the
                                                                           and further develop AI applications. Due to
                 economy and society, e.g. intelligent
                                                                           China’s large population and the near absence of
                 robots, smart unmanned vehicles or video
                                                                           any privacy related regulation, China is in a unique
                 image recognition systems.
                                                                           position to collect, process and analyse
            -    Ensure a sound hardware and software
                                                                           unprecedented amounts of data. Compared to the
                 base for AI development, such as
                                                                           EU it has thus more options to train AI models and
                 intelligent   sensors,    neural network
                                                                           accelerate the development of its application to
                 semiconductors and open platforms.
                                                                           numerous contexts, from everyday life to strategic
            -    Ensure, enhance and promote the
                                                                           considerations. While it cannot be the ambition of
                 development of smart manufacturing and
                                                                           Europe to remodel the regulatory environment of
                 the integration of AI in the industrial
                                                                           China, the question remains how sufficient access
                 sector.
                                                                           to suitable data sources and respositories could be
            -    Ensure the development of a public AI
                                                                           ascertained.
                 support     system   for,   e.g. training
                 resources, cybersecurity and network                      The EU should seek to actively promote and
                 infrastructure.                                           enable the diffusion of AI and Big Data.
                                                                           Today, China demonstrates a much wider
       New Generation of AI Development Plan
                                                                           commercialisation of AI and Big Data applications.
       In 2017, the State Council issued the ‘New                          Due to numerous government initiatives, a large
       Generation of AI Development Plan’ with a total                     AI and Big Data ecosystem has developed in
       budget of ¥870 m (€111.48 m81). It is part of                       China, between private companies, government
       sixteen ‘2030 Innovation Mega Projects’ listed by                   institutions and other relevant actors. As a result,
       the State Council, which are intended to address                    the adoption, diffusion and commercialisation of
       important bottlenecks in technology.82 83 The plan                  AI into all areas of daily life as well as the industrial
       defines 16 research tasks including, e.g. new                       economy has progressed further in China. To
       generation neural network models or game                            match these developments European companies
       decision    under      incomplete     information

       75
           China Academy        of   Information   and   Communications    80
                                                                              United States Information Technology Office.
       Technology 2019.                                                    81
                                                                              The amount in euro was calculated based on the ECB’s official
       76
           China Academy        of   Information   and   Communications    euro foreign exchange reference rates for 2017.
       Technology 2019.                                                    82
                                                                              Colvin et al. 2020.
       77
          Central Compilation   & Translation Press 2016.                  83
                                                                              DEVELOPMENT Solutions Europe Ltd. 2018.
       78
           China Academy        of Information and Communications          84
                                                                              Colvin et al. 2020.
       Technology 2019.                                                    85
                                                                              Ministry of Science and Technology 2017.
       79
          Triolo et al. 2018.                                              86
                                                                              Carter and Crumpler 2019.

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                                                                      15
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       have to increase their readiness for the integration     of    commercialisation     and   implementation).
       of these technologies.                                   According to the study, China is considered an AI
                                                                champion alongside the United States while the EU
       The EU should seek to improve citizens and
                                                                is lagging behind. Reasons for China's strong role
       businesses openness for AI and Big Data.
                                                                include the extensive use and commercialisation
       Another reason for the commercialisation in China
                                                                of AI, the availability of data and readiness of its
       is the prevalent positive image of AI and Big
                                                                companies.87
       Data. Compared to China, where digital
       technologies are often associated with progress,         While the EU will - in different areas - hardly want
       technological advances and national strength,            to imitate Chinese policies directly, the below
       Europeans tend to be more sceptical. AI in               overview shows that falling further behind is one
       particular is often associated with job risk, lack of    of the real threats of technological development.
       privacy and fear in European countries. This             Given the substantial head-start of both the United
       mistrust hinders a greater diffusion and unbiased        States and China in various areas, Europe may
       attitude towards such promising technologies.            face a double challenge. First, it must leverage its
                                                                remaining strengths in e.g. AI related to industrial
       Transnational clusters could strengthen
                                                                applications and seek to connect and integrate
       European development in AI and Big Data.
                                                                those with the existing dynamism in the United
       China shows excellent initiatives in promoting
                                                                States and China.
       startups, technologies and ideas related to AI and
       Big Data. As a result, a number of clusters and          Secondly, it must carefully consider which of the
       regions have emerged that are specifically driving       abovementioned success factors could be
       these developments and have succeeded in                 replicated in a specific European way, e.g. how
       developing as hotspots for AI and Big Data. Due          large datasets can be collected and rendered
       to the sheer size of China's market, such initially      accessible without compromising existing data
       local initiatives can scale easily and feed into what    protection regulations - that will most likely not
       has become a diverse national AI and Big Data            fundamentally change in the foreseeable future.
       landscape. The Chinese government provides
                                                                Figure 8 visualises China’s position in the AI-
       targeted funding and other incentives to AI and
                                                                competitiveness map. In addition to the
       Big Data companies, to enable them on their
                                                                categorised countries (champions, emerging
       growth trajectory. To develop similar momentum,
                                                                leaders, labs and underperformers), the current AI
       Europe will have to join forces in both the funding
                                                                competitiveness of the European Union is
       of     initiatives    and     subsequent      market
                                                                visualised by the white circle with dotted lines. The
       development.
                                                                volume of the dots refers to the level of domestic
       A study by the Boston Consulting Group estimates         R&D spending.
       the AI competitiveness of countries based on their
       capacity to develop AI (in terms of available talent
       and funding), and capacity to deploy AI (in terms
       Figure 8: AI-competitiveness map

       Source: Candelon et al. 2020a, p. 3.

       87
            Candelon et al. 2020a.

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Section 3

       3 Advanced Manufacturing and Robotics

       3.1       Major players
       Table 4: Major government stakeholders in China’s Advanced Manufacturing and Robotics development

           Scope                   Name and resulting organisations/initiatives, if applicable

           Ministries              Ministry of Industry and Information Technology (MIIT)
                                    -    National Manufacturing Strategy Advisory Committee (NMSAC)
                                   National Development and Reform Commission (NDRC)
           Other                   Institute of Advanced Manufacturing Technology (IAMT)
           institutional           Shenyang Institute of Automation, Chinese Academy of Sciences (SIACAS)
           players
           Authorities for         Standardisation Administration of China (SAC)
           regulation and          China Electronics Standardisation Institute (CESI)
           IPR                     China Robot Industry Alliance (CRIA)
       Source: authors.

       Ministries / central government bodies                           assessments and proposals on the future
                                                                        prospects of the manufacturing industry as well as
       The analysis of Advanced Manufacturing and
                                                                        identifying key issues and measures related to the
       Robotics reveals that similar political bodies play
                                                                        strategy. The NMSAC also assists in setting up
       an essential role in their development in China.
                                                                        additional think-tanks (including private and
       Among other related projects, the State Council
                                                                        corporate think-tanks) to provide knowledge-
       initiated MIC 2025 in 2015 and therefore placed a
                                                                        based support for the process of China becoming
       clear focus on the national promotion of
                                                                        a manufacturing power.90
       manufacturing.88 Regarding the ministries, the
       MIIT and NDRC seem to be the dominant players                    As outlined above, the National Development and
       for Advanced Manufacturing and Robotics in                       Reform Commission (NDRC) is an important
       China. Although other ministries (such as the                    policy actor directly subordinated to the State
       MOST) certainly play an important role as well,                  Council, which provides centralised guidance to
       insufficient availability of information hindered the            most ministries whose remit falls into or is closely
       analysis of corresponding programmes or                          related to the economic domain. In this capacity,
       initiatives.                                                     it supported the MIIT in developing the Robotics
                                                                        Industry Development Plan and, earlier on, the
       The Ministry of Industry and Information
                                                                        Ministry of Science and Technology (MOST) in
       Technology (MIIT) is perhaps the most influential
                                                                        developing the Made in China 2025 inititiave. More
       player in the field of Advanced Manufacturing and
                                                                        generally, it plays a central role in developing the
       Robotics in China. It has established various
                                                                        economic section of the Five-Year Plan - in which
       related committees and associations and strongly
                                                                        Advanced Manufacturing plays an increasingly
       influences current developments at both national
                                                                        central role. Furthermore, it triggers more
       and provincial level. It has launched a variety of
                                                                        concrete actions, e.g. addressing advanced
       projects on Advanced Manufacturing and Robotics,
                                                                        manufacturing at regional level by releasing a
       such as the ‘Smart Manufacturing Plan’ or the
                                                                        blueprint for the reform and development of the
       ‘Robotics Industry Development Plan’. In addition,
                                                                        ‘Pearl River Delta’ in 2008.91 Today, the Pearl River
       the MIIT is responsible for establishing many
                                                                        Delta plays a significant role in China's Advanced
       related innovation centres and guidelines in China.
                                                                        Manufacturing landscape, which will be discussed
       Even though the State Council is responsible for
                                                                        later.
       the coordination of MIC 2025, the MIIT is in direct
       charge of this big national strategic plan.89                    Other institutional players
       The National Manufacturing Strategy Advisory                     In addition to the ministries presented, other
       Committee (NMSAC) was founded in August 2015                     institutions play an important role in the
       under the administration of the MIIT. It acts as a               development of Advanced Manufacturing and
       think-tank and is responsible for studies,

       88
            State Council 2015a.                                        90
                                                                             Ning 2018.
       89
            Frietsch 2020.                                              91
                                                                             National Development and Reform Commission 2008b.

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ATI international report on China

       Robotics in China. In this context, the IAMT and            strengthen robotics developments, for example of
       the SIACAS stand out in particular.                         Chinese    research     teams    with    leading
                                                                   manufacturing companies outside China.94
       Based in Jiangsu Province, Institute of Advanced
       Manufacturing Technology (IAMT) is a sub-unit of            There are several technical committees for
       the Hefei Institute of Physical Science, Chinese            standardisation in Advanced Manufacturing and
       Academy of Sciences (CASHIPS), conducting                   Robotics. The China National Technical Committee
       research on Robotics and smart devices.                     for    Automation    Systems     and    Integration
       Established in January 2007, the IAMT has since             Standardisation (SAC/TC 159) includes a ‘Robotics
       undergone several mergers and affiliations with             Devices Technical Subcommittee’, which is mainly
       other institutes. It is one of the first members of         responsible for the development of standards for
       the Jiangsu Industrial Technology Research                  industrial robots, system interfaces as well as
       Institute (JITRI). IAMT's research focus includes           parts and controls. In addition, the National
       Robotics, intelligent vehicles and intelligent              Information Security Standardisation Technical
       equipment, for which three research centres                 Committee (SAC/TC 260) is responsible for the
       (Intelligent Robotics Centre, Intelligent Vehicle           development of security-related standardisation,
       Centre and Intelligent Equipment Centre) have               for example in the areas of smart manufacturing
       been established to provide technical support for           and biometric facial recognition. The National
       innovations in the intelligent equipment industry.          Technical Committee 268 on Intelligent Transport
       The institute is now emerging as a training hub for         Systems (SAC/TC 268) develops standards
       experts in the field of Advanced Manufacturing in           specifically for intelligent transportation. These
       China.92                                                    three subcommittees were also listed in CESI's AI
                                                                   Standardisation White Paper.95 In its ‘Main Points
       The Shenyang Institute of Automation, Chinese
                                                                   of National Standardisation Work in 2020’, the
       Academy of Sciences (SIACAS) was established
                                                                   SAC also draws attention to the need to carry out
       in 1958 and is regarded as the national leading
                                                                   ‘pilot work on standard research, supply and
       institute in the development of automation science
                                                                   standardisation in the field of integration of
       and technology in China. Considered the ‘cradle of
                                                                   Advanced Manufacturing and modern service
       China's Robotics technology’, the institute is a key
                                                                   industries’ with the overall goal of improving the
       institution     for   industrial  and     high-tech
                                                                   standardisation system and the capacity of highly
       development in China. It focuses on the three
                                                                   skilled development in China.96
       fields of Robotics, intelligent manufacturing and
       opto-electronic information technology. The                 Another prominent player in China’s industrial
       research centre supports more than 10 national              policy landscape is the China Robot Industry
       and provincial central laboratories and technical           Alliance (CRIA), a non-profit organisation
       centres, as well as an educational facility for             consisting     of    companies,     manufacturers,
       master's       degree     programmes,      doctoral         universities, institutions as well as other
       programm*es and postdoctoral programs. SIACAS               organisations in China that work together
       operates various exchange and cooperation                   voluntarily. Established in 2013, the CRIA pursues
       programmes with research institutions and high-             various tasks, such as the implementation of
       tech companies, at the international level as               national industrial policies and measures or
       well.93                                                     strengthening the dialogue between members on
                                                                   technologies, the market and intellectual property
       Authorities for regulation and IPR
                                                                   rights regarding Robotics standards. The CRIA
       Looking at the stakeholders responsible for                 represents China in the International Federation of
       regulation and IPR for Advanced Manufacturing               Robotics (IFR) as a national association member.97
       and Robotics, the China Robot Industry Alliance
                                                                   Major business actors
       (CRIA) contributes to current developments
       alongside the SAC and CESI in China.                        In addition to the stakeholders presented, a
                                                                   number of companies play a significant role in
       New efforts via patents are designed to help
                                                                   China's   developments    in both   Advanced
       enhance China's role as a globally successful
                                                                   Manufacturing and Robotics.
       Robotics manufacturer. In 2016, the Industrial
       Robot Patent Alliance established a patent pool for         Table 5 summarises the largest business players
       industrial robot technologies to improve the                as well as four promising start-ups in Advanced
       availability of critical, high-quality patents in           Manufacturing and Robotics in China.
       China. In addition, China is pursuing a strategy to
       increase collaborations and acquisitions to

       92
          Institute of Advanced Manufacturing Technology 2020.     95
                                                                        China Electronics Standardization Institute 2020a.
       93
           Shenyang Institute of Automation, Chinese Academy of    96
                                                                        Seconded European Standardization Expert for China 2020.
       Sciences 2020.                                              97
                                                                        China Robot Industry Alliance 2020.
       94
          Nan 2016.

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