China has a mission to shape the future of artificial intelligence (AI) – and it is taking concrete steps to realise it. In July 2017, the State Council released a national strategy for AI development, which comprises a three-milestone approach.

The first milestone in 2020 will see China keeping pace with leading AI technology and applications. By 2025, the country will be making major breakthroughs in AI. The eventual milestone is 2030, where China is seeking to be a world leader in the field as the primary global AI innovation centre.

The AI strategy is supported by specific targets and figures. For example, by 2030, China is looking at an industry gross output exceeding RMB 1 trillion (S$200 billion) and AI-related gross output exceeding RMB 10 trillion (S$2 trillion).

Industries and Players

With the government’s drive, AI and blockchain form the next wave in China. Star players in China’s AI market today are Baidu, Alibaba and Tencent – commonly known as BAT. These companies integrate AI and big data to gain insights into consumer behaviour. Through deep learning processes, the technologies offer consumers relevant products or services that are tailored to their demand, thereby enhancing overall consumer experience.

These companies also go beyond retail to explore AI across industries and markets. For example, Tencent, with its “AI in All” slogan, has invested heavily in AI for the transport and healthcare sectors. Didi Chuxing, the world’s largest ride hailing mobile application, uses AI to optimise its route planning and helps cities develop smart transport solutions.

Indeed, Didi Chuxing is among one of many rising tech companies in China that are engaging AI to their advantage. In this league, within the media industry, Beijing-based content platform Jinri Toutiao is analysing user interactions to generate customised recommendations for each individual. Its main source of revenue is pushing related advertisements to users.

In the logistics sector, the world’s largest on-demand delivery platform Meituan-Dianping is tapping AI to develop a smart distribution system. This includes using autonomous distribution vehicles for unmanned delivery, which the company says it will officially launch in 2019.

Opportunities for Singapore Companies

Industry players that Enterprise Singapore hosted in conferences on Chinese tech say that “AI” has become a buzzword in China today – which means it can also be used too loosely without deep or meaningful engagements with it. For example, simply having a tech company or utilising machine learning does not imply that a company is harnessing AI.

So, even as the technical definition of AI is “intelligent machines”, developing AI ultimately needs to go beyond the technology itself. Industry players advise Singapore companies to understand AI, especially in relation to how it can solve real problems or contribute to people’s lives, such as aiding the elderly or bridging language barriers. A technology can be highly innovative but end up unproductive if it does not address a problem. In short, problems are where the opportunities are, and AI is simply a tool.

What about the opportunities in AI when it comes to geography? The top three most innovative cities – where AI activity is also flourishing – are Beijing, Shanghai and Shenzhen, according to China’s City Innovation Ability Rankings 2017. The ranking uses hot money, unicorns, house rental and partner indices for its measurement.

In the bigger picture, Singapore has formed partnerships in various Chinese regions including Guangdong, Chongqing and Zhejiang, where Singapore companies can tap the opportunities. In Guangdong, the Sino-Singapore Guangzhou Knowledge City will focus on biomedical innovations and AI in healthcare. In Chongqing, which aims to be a transport hub between West China and Southeast Asia, there will be a demand for smart technologies. Meanwhile, Zhejiang is ramping up innovation – AI in cross-border e-commerce will find a keen audience there.

Next Steps

Although the AI and tech scene is booming in China, the Chinese market operates in its own unique way and can be challenging for entrepreneurs, startups and foreign companies to enter – but this should not deter Singapore companies.

Rather, challenges should encourage Singapore companies to be more astute and strategic in their approach in entering a market of abundant opportunities. Industry players highlight that VCs are definitely on the look-out to invest in tech companies with the right talent and strong industry experience, and which want to expand into China.

Crucial among all factors for Singapore companies is that they must leverage partnerships with Chinese companies to better their approach and technology. This is because with a lack of scale and connections, Singapore companies face the challenge of acquiring the right data to access markets – industry players have cautioned that big data does not mean the right data.

If you are a Singapore company that is considering entering China’s tech scene, check out these tips and insights from our Deputy Director (North China) on how you can navigate the country’s tech scene.

How Enterprise Singapore Can Help

Excited about the AI prospects in China? Please reach out to us at go.gov.sg/askenterprisesg if you’re seeking to take your enterprise into China and want to be better equipped.

Next: Entering the Chinese Tech Scene? Here Are 4 Moves to Consider.