Technological Entanglement? — Artificial Intelligence in the U.S.-China Relationship

Publication: China Brief Volume: 17 Issue: 17

China is attempting to turn the Zhongguancun area of Beijing's Haidian district into a hub for AI research

Artificial intelligence (AI) has become a new arena for engagement and competition between the United States and China. In July, China’s State Council published the New Generation AI Development Plan (新一代人工智能发展规划) which declared, “AI has become a new focal point of international competition. AI is a strategic technology that will lead the future,” articulating China’s ambition to “lead the world” and become the “premier AI innovation center” by 2030 (State Council, July 20). Perhaps recognizing that a new era has begun, the U.S. National Security Strategy (NSS) published in mid-December announced, “To maintain our competitive advantage, the United States will prioritize emerging technologies critical to economic growth and security” (National Security Strategy, December 18). In particular, the NSS highlights that AI is advancing especially rapidly and could present growing risks to U.S. national security going forward, while characterizing China as a “strategic competitor” that unfairly seeks to “unfairly tap into [U.S.] innovation” through the theft of intellectual property and “cyber-enabled economic warfare.” Concurrently, the U.S. and China are pursuing military applications of AI, recognizing its potential to transform the character of future conflict (State Council, July 20; Battlefield Singularity, November 28).

Even as Beijing and Washington highlight international competition in AI, the U.S. and Chinese technology sectors remain more entangled than ever, competing and collaborating by turn. There are high and growing levels of Chinese tech investments in the U.S. and in U.S. tech investments in China, even as concerns grow about the risks of such investment. Indeed, between 2012 and mid-2017, China-based investors bankrolled U.S. tech companies to the tune of $19 billion across 641 different deals, with particular focus on AI, robotics, and augmented or virtual reality (CB Insights, August 1). Increasingly, U.S. investors are also investing in Chinese AI enterprises. For instance, Chinese AI startup ByteDance, which makes the AI-enabled news aggregator Toutiao, has raised at least $3.1 billion with support from prominent U.S. private equity firms (CB Insights, December 12). Major Chinese companies—including Baidu, Tencent, Huawei, iFlytek, and SenseTime—are establishing AI laboratories and research partnerships in the U.S. and many leading Chinese AI entrepreneurs are graduates of top U.S. universities (South China Morning Post, March 25; Xinhua, April 28; Huawei). While Chinese tech companies are eagerly seeking to poach top talent from Silicon Valley, Google just opened its first AI laboratory in China, seeking to take advantage of top AI talent and future human capital potential (Google, December 13).

Although such engagement can enhance U.S. and Chinese innovation ecosystems to mutual benefit, this level of entanglement can be and has been exploited to advance Chinese state plans and priorities. However, the reality of national and military competition is becoming increasingly apparent as China advances a state-driven agenda for AI development to enhance its economic and military competitiveness. The U.S. and China possess very different political economies in their respective national approaches to AI. Certainly, it is clear that the locus of innovation in AI in the U.S. and China has largely shifted towards the private sector. The dynamism of major Chinese tech companies and a growing number of start-ups has been a key impetus for China’s AI revolution. However, as AI emerges as a national priority at the high levels, the Chinese Party-State is seeking to ensure that the development of AI in China follows Chinese Communist Party (CCP) interests and imperatives.

As China pursues a national strategy of “innovation-driven” economic development and military modernization, AI has emerged as a top-level priority. The first major plan to highlight AI was the May 2016 “Internet Plus” Artificial Intelligence Three-Year Action Implementation Plan (MIIT, May 25, 2016). This plan established objectives for the creation of foundational infrastructure and innovation platforms for AI, along with the creation of an industry amounting to billions of RMB, by 2018 (Xinhua, May 25, 2016). In August 2016, the 13th Five-Year National Science and Technology Innovation Plan (国家科技创新规划) launched fifteen “Science and Technology Innovation 2030 Major Programs” (科技创新2030—重大项目) that included both big data and intelligent manufacturing and robotics (State Council, August 8, 2016).

AI appears to have emerged as a top-level priority in response to AlphaGo’s victory over Lee Sedol, which has been characterized as a “Sputnik moment” for China. and concerns over the U.S. AI agenda that appeared to be emerging in late 2016. The New Generation Artificial Intelligence Development Plan released in July represents an attempt to lead the world in AI by 2030, pursuing a “first-mover advantage” to become the “premier global AI innovation center.” This new multibillion-dollar initiative will support advantages in next-generation AI technologies that could result in paradigm changes, including brain-inspired neural network architectures and quantum-accelerated machine learning. China’s objectives for advances in AI are divided into three stages, with 2020, 2025, and 2030 for first keeping pace, then reaching a “leading level,” and then becoming the world’s “premier AI innovation center.” The plan incorporates projects that seek to leverage synergies between AI and other emerging technologies, including big data, cloud computing, intelligent manufacturing, robotics, quantum computing, quantum communications, and brain science (State Council Information Office, July 21).

Although the trajectory of this ambitious agenda remains to be seen, the Chinese government’s approach to its implementation is starting to take shape. The New Generation Artificial Intelligence Development Plan and its associated offices are meant to promote a whole-of-government effort to develop AI including civilian and military agencies (Xinhua, November 21).

China has also launched a New Generation AI Strategic Advisory Commission to help coordinate. In addition to senior academics, it includes prominent experts from the private sector as well as members from the Chinese military.

Looking forward, a distinct dimension of AI development in China will be the high degree of linkage between civilian and military advances pursuant to an agenda for military-civil fusion (军民融合). Although the concept of civil-military integration (军民结合) or military-civil fusion is not new, it has now been elevated to the level of national strategy, advanced through CCP’s Military-Civil Fusion Development Commission (中央军民融合发展委员会), established in early 2017 under the leadership of Xi Jinping himself (Xinhua, January 23; Xinhua, June 20, 2017). Unsurprisingly, China’s new AI plan explicitly highlights an approach of military-civil fusion to ensure that advances in AI can be readily leveraged for national defense (State Council, July 20). To achieve this objective, the plan calls for communication and coordination among scientific research institutes, universities, enterprises, and military industry units to ensure that military and civilian resources will be shared. The official involvement of the Central Military-Civil Fusion Development Commission confirms PLA involvement and the inclusion of a focus on military applications of AI within this national agenda.

Given the number of applications for AI disentangling private and state or civilian and military efforts can be difficult. This level of entanglement is deliberate, provoking concerns about the extent to collaboration between the U.S. and Chinese ‘private sectors’ could be exploited to support state or even military objectives. China continues to encourage its own AI enterprises to pursue a “going out” (走出去) strategy to build up indigenous capacity. This approach includes overseas mergers and acquisitions, equity investments, and venture capital, along with the establishment of research and development centers abroad. Beyond investment, such incubators seek to promote the “bringing in” of top enterprises to advance the development of China’s innovation ecosystem (MoST, May 12). Certainly, it would be overly simplistic to characterize all Chinese investment in the U.S. as linked to state or military objectives, but it is equally problematic to fail to recognize and evaluate the risks.


For the U.S. and China, AI will remain a domain of simultaneous cooperation and competition. Chinese state plans and priorities in AI should prompt a reevaluation of technological entanglement that result in cases of exploitation of the openness of the U.S. innovation ecosystem.

Concurrently, it is clear that the playing field is not truly level for U.S. tech companies in China. Even as Baidu plans to tests self-driving cars in the U.S., U.S. tech companies have been banned from doing so in China, due to purported concerns over espionage risks.

While seeking to combat the more predatory aspects of Chinese economic statecraft, it will also be critical to recognize the competitive advantages for the U.S. of sustaining openness, exchange, and collaboration in innovation. For the time being, the U.S.’s ability to attract top talent from around the world means it retains a key advantage in human capital. As strategic competition seemingly intensifies, the U.S. must recognize the complexities of a new age of technological competition and prioritize policies that will support and sustain innovation.