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Policy Paper
November 2021

China Trends #10
How AI Will Transform China

Viviana Zhu
China analyst, former Research Fellow, Institut Montaigne’s Asia Program

Viviana Zhu was Research Fellow at Institut Montaigne until January 2023. Prior to that, as Coordinator of the Asia Program of the European Council on Foreign Relations (ECFR), Viviana  was responsible for event coordination, reporting, and research support.

François Godement
Special Advisor and Resident Senior Fellow - U.S. and Asia

François Godement is Institut Montaigne’s Special Advisor and Resident Senior Fellow - Asia and America. He is also a Nonresident Senior Fellow of the Carnegie Endowment for International Peace in Washington, D.C., and an external consultant for the Policy Planning Staff of the French Ministry for Europe and Foreign Affairs.

Pierre Sel
Co-founder of EastIsRed

Pierre Sel graduated from Sciences Po in International Relations. His research focuses on the social credit system, e-government and new information and communications technologies (ICT) in China. He has worked at the French Embassy in Beijing and IRSEM, the Strategic Research Institute of the French Defense Ministry. He is the co-founder of EastIsRed, a French research-service company focusing on China.

Rebecca Arcesati
Analyst at the Mercator Institute for China Studies

Rebecca Arcesati is an Analyst at the Mercator Institute for China Studies (MERICS). Her research focuses on China’s digital and technology policies and how they impact Europe. She covers digital infrastructure and the global expansion of Chinese tech firms, data and emerging tech governance issues, as well as EU-China relations in the technology and innovation spaces.

Prior to joining MERICS, Rebecca was involved in a project helping Italian tech startups scale up in China and worked on gender equality with the United Nations in Beijing. She holds an LL.M. in China Studies with a focus on Politics and International Relations from Peking University, where she was a Yenching Scholar. She also received an MA in International Studies from the University of Turin, with a specialization in China’s foreign policy and political economy. Rebecca studied Chinese language in Beijing and Dalian and holds a BA in Language Mediation and Cross-Cultural Communication.


François Godement, Senior Advisor for Asia

China’s digital and IT sector has grown so much, and become such a leading global supplier, that it has spawned images that are even larger than life: such is the case for "social credit", or pandemic contact tracing, and currently with AI.

China is clearly in the forefront, thanks in part to central decisions and market scale. It possesses unique advantages: the scale of its big data, a fast growth that favors leapfrogging and the introduction of innovation, a public that is often digital native, and the government’s uncontested power to make decisions and undertake large projects. A generation of data and computer specialists has sprung up, and start-ups are helped by abundant venture capital, itself pushed ahead by the certainty that this is a sector promoted by the government. However, China has been less impressive in developing algorithms, and slowed down in public developments by the silos and local fragmentation of its bureaucracy. How else could hybrid giants such as Alibaba or Tencent draw the party state’s ire because of the breadth and potential applications of their own data banks? It is at this point that the issue of data privacy was picked up by the government. But if one defines the leading edge by the amount and quality of R&D, the "D" for development prevails over the "R" for research. It is social, managerial and marketing inventiveness that defines China’s edge in AI applications, which is of course linked to the absence of overt social resistance and the competition among local administrators to appear at the forefront of a new wave.

A generation of data and computer specialists has sprung up, and start-ups are helped by abundant venture capital, itself pushed ahead by the certainty that this is a sector promoted by the government.

Our three authors have focused on three cases of AI use across the board in China. The most appealing at this point is clearly educational AI, because it fits so well a stereotype on surveillance. Beyond facial (and face mood) recognition and speech recognition software, it promises a level of student monitoring that includes the tracking of brain waves. Neither Michel Foucault with his famous panopticon nor Neo-Confucian moralists could have thought this up. The risk is clearly outlined by perceptive Chinese critics that this innovation ends up stifling innovation even more among students.

The second sector is the auto industry and autonomous driving. Fascinatingly, China is looking for solutions that spring from new collective infrastructures rather than from individual self-driving cars loaded with sensors. While this may also be in relation to China’s political culture of control, one should admit that many IT developments around the global auto industry increasingly allow the surrender of massive data to auto, telecom, and insurance companies. China’s priority to road infrastructure for autonomous driving, on the other hand, fits well with congested urban landscapes. As such, it fits well with our third test case – smart cities. China’s advances there can be deduced, as is the case for smart ports, from the speed of 5G based Internet of Things (IoT) introduction. Again, China’s bulldozer approach to infrastructures may pay off. As with the two other cases, one can only wonder how much societal resistance to innovation in our own societies, often coated into the preservation of a traditional environment and the complexity of property and user rights, may be an obstacle to innovation. But this case also hints at examples of entrepreneur hype, selling superficial AI projects to gullible city administrators.

A fitting conclusion is that any plan for AI introduction to our own societies would do well to study China’s test cases – their drawbacks certainly, but also their advances.

Smart Education: Between Hype and Reality

Since the Chinese government started rolling out plans for developing smart education, a host of tech companies and startups have rushed to create education technology (EdTech) products, while local governments and schools compete for the adoption of the most innovative solutions. Rebecca Arcesati, Analyst at Mercator Institute for China Studies (MERICS), takes an in-depth look at the hype and reality of China’s smart education. The digitalization of education seems to have provided an opportunity for hardware and software companies, rather than actually serving educational purposes. Chinese experts point out that blindly adopting new technologies for education with the goal of modernizing education is not sufficient. There is no one-size-fits-all approach; true educational reform is imperative.

Overriding the Risks of Smart Transportation

China has embarked on the journey of "smartening" its transportation system as a project of strategic importance, with the total size of the market reaching USD 25.9 billion in 2020. While there seems to be a general enthusiasm and policy supports, China’s smart transportation is lagging behind in certain technologies, and carrying some risks. In a smart transportation ecosystem, one missing component might cause the system to malfunction and make it "smart" but not "capable". Viviana Zhu, Policy Officer at Institut Montaigne’s Asia Program, analyses China’s smart transportation development, and how it is perceived in the context of data and international competition

Smart Window Dressing for China’s Urban Life

Government planners and local officials are rushing to make China the most advanced country in terms of smart cities, creating a tempting market for tech companies. Pierre Sel, co-founder of EastIsRed, unravels the ongoing smart city frenzy in China. Ningbo is a case in point, often cited as a successful smart city. However, the reality of smart city construction in China presents a different picture, which is heavily debated domestically. Upon closer inspection, most projects are perceived as either unrealistic, useless, or as a waste of resources. Policymakers seem to be aware of the problems, but the drive for smart city construction will continue.

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