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China using AI to ease economic woes, but focus is to stand at the 'center of the revolution,' experts warn

China has placed artificial intelligence at the center of its military and economic modernization efforts as its economic problems continue to grow.

China may rely on artificial intelligence (AI) to manage approaching economic troubles, but that is just one part of the spectrum of goals Beijing has for the burgeoning technology, experts told Fox News Digital. 

"Certainly, China has put artificial intelligence at the center of its economic and its military modernization efforts," Matt McInnis, senior fellow for the Institute for the Study of War's China program, said. 

"[China] sees artificial intelligence as a potential way to achieve economic and military superiority and potentially even help, you know, kind of provide a long-term foundation for much greater prosperity than it has been able to achieve in the past five years or decade. 

"I think China, in many ways, has almost put perhaps too many eggs in the AI basket, which I think is going to be concerning for them overtime, even though we all know that AI could be a real game changer in the world economy," McInnis added. "I don’t think that’s any different for China than it is for the United States. But China, as it’s looking at its economic problems as well as its desire to leapfrog its military over the U.S., is banking quite a bit on AI being key for that." 


The formerly fastest-growing economy has faced a number of speed bumps this year, starting with a slowdown in GDP growth that has led some analysts to suggest China may not overtake the U.S. economy, a goal that many treated as an inevitability by some time in the 2030s. 

The International Monetary Fund in October adjusted growth forecasts for China down to 5% this year and 4.2% in 2024, down slightly from its forecasts in July, The Associated Press reported. Those numbers have risen again but still note a drop from 2023 to 2024.

The 2021 supply chain crisis, which resulted from Beijing’s draconian handling of the COVID-19 pandemic, forced many countries to reconsider their reliance on China for production and trade. 

Additionally, China has a growing workforce crisis with youth unemployment hitting a peak 21.3% in June, a record high that prompted Beijing to stop releasing figures. The country’s National Bureau of Statistics claimed it needed to reconsider the method of calculating youth joblessness, arguing "the economy and society are constantly developing and changing" and "statistical work needs continuous improvement."


At the same time, China has emerged as one of the leading nations on AI development, with few restrictions on companies pursuing breakthroughs and integrating the tech in various sectors, primarily the military. China does, however, heavily regulate AI use in the private/commercial sector in an effort to maintain political stability.

McInnis noted that China’s priority on AI, particularly in the military, has raised concerns about its goals and has only heightened the need for dialogue and regulation. But China likely views any agreement with the U.S. as one that "in essence … is going to unfairly restrict their AI-related activities." 

"The fact that China was not willing to go further on the objectives on AI governance, I think that's not surprising, but also still concerning that China is not ready to enter very serious discussions about the ethics and norms about how artificial intelligence will be used, particularly in military settings," McInnis said. He added that the U.S. is "going to continue apparently to have dialog with China on this."

China was one of the signatories of the Bletchley Declaration in the United Kingdom in October, which set out a requirement for collaboration and alignment from member states to develop significant regulatory bodies and frameworks for emerging AI technology to ensure it does not lead to dangerous advances. 


Gregory C. Allen, the director of the Wadhwani Center for AI and Advanced Technologies for the Center for Strategic and International Studies, agreed that China’s goals for AI have far wider applications and aims than merely economic, even as he acknowledged the many benefits AI will have on workforce capabilities and related areas. 

"I would say it’s probably not fair to say the No. 1 reason why China is pursuing AI is because of their declining labor force," Allen said. He argued China mainly wants to stand at the center of an "extraordinary" tech revolution that could, as one of many effects, result in much-needed economic growth.

"It is certainly the case that China is currently faced with a shrinking labor force and that this is a challenge for their economy," Allen added. "It's also true that China is the No. 1 purchasing power worldwide of robots, both in absolute purchases and in imports, mostly for industrial applications, and that is explicitly intended to address the challenge of a declining workforce and prospective ROI

"When you hear private sector companies talking about AI, they’re almost always talking about machine learning and so robots can use machine learning, but the vast majority of industrial robots do not use machine learning or modern AI technology. They're a more traditional computing software-based approach to automation."


Allen pointed out that AI with machine learning topped China’s 2021 five-year plan, but that is because the technology is "enabling all types of very promising activities and economic opportunities." 

"China wants to be the global leader in AI technology, both from a research perspective and in commercial adoption," Allen said, stressing it "does have some overlap with addressing the country’s economic problems."

Instead, Allen suggested that China’s more prominent focus for AI utilization is in domestic population surveillance, like facial recognition from computer vision technology and voice recognition and algorithmic manipulation, which would allow for greater consumer adoption and unifying data across application ecosystems. 

"When you ask what is China using AI for, it's sort of like asking what are you using software for?" Allen said. "Ultimately, I think that the ambition and the expectation is that artificial intelligence is going to be deployed into most sectors of the economy to some greater or lesser extent, in the same way that computers and software are now part of every sector of the economy."

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