AI Arms Race: China and the Confucian-Communist Edge

The American fugitive Edward Snowden triggered the West’s current data privacy concerns nearly six years ago when he revealed secret U.S. government programs that collect data on American citizens. Since then, there has been a drumbeat of disclosures about how people’s personal information is collected and shared, alarming the public and leading to new restrictive rules.

Not so in China. Even more pervasive data collection raises relatively few eyebrows. One reason for the stark disparity is that, in a one-party state, the Chinese have no choice. Another can be traced to an itinerant sage who roamed the region 2,500 years ago: Confucius. And thanks to the Communist Party and Confucius, China may be poised to lead the world in artificial intelligence.

Last year, Russian president Vladimir Putin ominously proclaimed that whichever country “becomes the leader in this sphere will become the ruler of the world.” But it is the U.S. and China, not Russia, that are winning the race so far. Already, AI applications are rippling through everything from our phones and our cars to factories and military weapon systems. The new technology promises to transform each country’s economy and military, potentially shifting the global balance of power.

Confucius, to remind anyone who thinks only of fortune-cookie aphorisms at the mention of the name (Confucius says …), was a fifth-century BC philosopher whose teachings form the backdrop to China’s (and much of East Asia’s) worldview, including a devotion to a strong social hierarchy. It is a worldview that is distinctly anti-democratic, though academics debate whether current attitudes are cultural or coerced.

What does that have to do with artificial intelligence? AI lives on data. The more data that is fed into machine-learning algorithms, the more accurate the results. China is awash in data like no other country and with the Communist Party on one side and Confucian culture on the other, that data is being used to train AI systems with little of the resistance met in the West.

Confucianism discourages individualism. The hierarchical view of society, meanwhile, has long favored a strong central authority. For thousands of years, interrupted by regular intervals of chaos, Chinese society has been organized around an all-powerful leader. 

In 1949, the Communist Party replaced the traditional emperor with a Party Chairman – Mao Zedong – and more recently with Party general secretaries, now Xi Jinping, who also serves as president. It replaced the rigorous Confucian examination system that trained a governing class with Party schools, civil service exams and a mostly meritocratic organization that allows the brightest and most ideologically appropriate cadres to rise to the top. For all of the early talk of a classless society, the Confucian hierarchy has largely remained in place.

While Chinese citizens may grouse about controls on free speech, for example, they accept those controls with a docility that surprises most people in the West. How much that is determined by culture and how much by repression remains to be seen. Still, except for a thin veneer of Western-facing intellectuals, China’s citizens largely accede to a level of surveillance and control that Westerners regard as terrifyingly Orwellian.

While Snowden’s disclosures sparked a wave of anxiety in the U.S., the Chinese government’s data collection programs are largely tolerated by its citizenry. That is, in part, because they have no choice and, in part, because the Chinese are accustomed to government tracking: everyone has, from birth, a file at a police station where they are registered as a resident that holds everything from records of their marriages and divorces to secret reports of any political activity in which they have engaged.

And while there are many critics of the government or government policy in China, the Chinese generally support a strong central authority even if it means sacrificing their own political voice and some personal freedom. Having never been a democratic society, there are no cultural expectations of political participation. After enduring a century of near constant instability, beginning with the slow disintegration of the Qing Dynasty in the late nineteenth century through the disastrous Cultural Revolution of the 1960s and 1970s, perhaps the greatest fear among the populace is political chaos. That’s why the wealthiest move their money abroad.

Chinese regularly cite the breakup of the Soviet Union and economic hardship that followed as a cautionary tale. Meanwhile, the gridlock in many Western governments, including the U.S., has tainted views of democracy – particularly since the rise of untested and unqualified personalities to positions of power. Anyone reaching the level of Politburo or president under the Communist Party system will have endured decades of training that includes running a state enterprise or province larger than any multinational corporation.

The Chinese are mindful, too, of the near miraculous successes that the government has achieved since the end of the Cultural Revolution. It has built the world's largest expressway system by length, reached the highest fiber-optic broadband penetration in the world, and now boasts the largest high-speed rail network on the planet. In that time, it has also lifted more people out of poverty than anywhere else in the world.

Several other factors give China an edge in the implementation of data-driven artificial intelligence: its vast population, which generates more data than any other country, its focus on STEM education, which is producing record numbers of AI engineers, and the state’s deep pockets to support a national AI strategy.

While Westerners, too, tolerate the collection of enormous amounts of data, the Chinese public “seems to be even more complacent about data privacy than here,” says Andrew J. Nathan, a professor of political science at New York’s Columbia University and specialist in Chinese political culture.

Minxin Pei, a professor at California’s Claremont McKenna College and expert on governance in the People's Republic of China, argues that a lack of data protection outweighs cultural considerations in that regard. “The Chinese government has very few regulations on the books that protect the collection and use of personal data,” he said in an email exchange.

But autonomous vehicles illustrate one area where China’s Confucian culture gives it an edge. Tens of thousands of Americans die in car accidents each year, a number that could undoubtedly be dramatically cut if self-driving technology were implemented widely. But liability concerns and lack of clear policy has pushed that implementation far into the future. In China, however, the government and the citizenry are much more willing to let technology lead policy if it is for the collective good.

The central government, for example, is building a new smart city, Xiongan, at an estimated cost of $380 billion for just 3 million residents. The city is incorporating the latest data collection systems in its infrastructure and will include roadways – some underground - dedicated to self-driving vehicles. Provincial and municipal governments are following suit: Zhejiang province has announced plans to build a smart superhighway for autonomous vehicles that will increase speeds by up to 30 percent while dramatically reducing fatalities on the road.

China’s most comprehensive data-driven project, called Sharp Eyes, will tie networks of closed-circuit cameras together and feed live video into AI systems that can recognize faces, spot anomalous behavior and track individuals in real time. Pilot systems have been deployed across the country and are already credited with dramatic drops in crime. The central government’s stated aim is to eventually extend the surveillance from cities to towns and villages and even the countryside, putting as much as 90 percent of the population under constant supervision.

Citizens will be encouraged to watch surveillance feeds through their television sets and smartphones to augment machine-learning analysis, an extension of the Communist Party neighborhood committees that keep watch on the comings and goings of residents. In pilot programs so far, such community engagement has been enthusiastically embraced.

Another project will link various behavioral data, from financial transactions to social media posts, with the country’s national ID cards to create what has been called a social credit score that can be used to punish or reward citizens.

Private companies are helping, collecting oceans of data that are available to researchers and the government alike. Nearly 800 million Chinese use the tech giant Tencent’s smartphone app WeChat to pay for goods and services – everything from vegetables at outdoor markets to airplane tickets to foot massages – in the process generating a flood of mobile payment data that can be mined for specific individual preferences or broad demographic trends.

China also has a “later-mover advantage,” applying advanced technology to relatively backward segments of its economy that would face entrenched resistance in more developed countries. Together with Alibaba’s Alipay system, WeChat “has turned Chinese cities into the first cashless environments since the days of the barter economy,” writes Kaifu Lee, a thought leader on AI in China.

In 2017, iResearch Consulting Group, a market research company in China, estimated that Chinese mobile payment spending outnumbered that in the United States by a ratio of fifty to one. For 2017, total transactions on China’s mobile payment platforms reportedly surpassed $17 trillion—greater than China’s GDP.

In his recent book, “AI Superpowers: China, Silicon Valley and the New World Order,” Mr. Lee notes that “data from mobile payments is currently generating the richest maps of consumer activity the world has ever known, far exceeding the data from traditional credit-card purchases or online activity captured by ecommerce players like Amazon or platforms like Google and Yelp.”

That data, in turn, gives China an edge in developing AI-driven services. “More data leads to better products, which in turn attract more users, who generate more data that further improves the product,” writes Mr. Lee. While Western consumers express outrage and increasingly demand control of their data, Chinese consumers have voiced nary a peep of protest.

AI implementation, meanwhile, is expected to translate directly to national productivity and income gains. PricewaterhouseCoopers estimates that AI will add $15.7 trillion to global GDP by 2030, with China getting nearly half of that increase. North America, by contrast, will get less than a quarter of that.

Mao would be delighted. Confucius would be amazed.