Leadership

• Unlike the US government, China’s leadership believes in and supports science and research. They are more focused on innovation and support its development.
• Although the US president spoke about supporting advancements in science, his budget showed spending cuts in this area.
• With China’s government’s support, they have seen great technological advancements in artificial technology.
•  Government support brings more companies towards wanting to try whatever innovation is being exposed and exhibits a sense of trust and support of this innovation or idea.
• Government support may also bring around the early use of technology, which has not yet been proven, adding a certain speed to market innovations.

Research Investments (Federal)

• China has surged past the US in terms of scientific investment and progress.
• Although many experts believe that this is as a result of Chinese leadership, others will put blame on the shortcomings of the US in terms of scientific investments.
• In the past, US federal investment in scientific research caused a growth in understanding and development while gaining economic growth at the same time. Immunotherapies, as well as GPS, stemmed from some form of past federal investment.
• Over the last few decades, this scientific research federal investment has significantly dwindled becoming almost half of what it once was in the 1970s.
• With US leaders paying little attention to the importance of investing in artificial intelligence, supercomputers, and other new technological innovations, they are beginning to fall behind. As a result, China has risen to the top.
• China is highly invested in these upcoming technologies such as artificial intelligence and has an estimated research expenditure of $12 billion in 2017. This number has been predicted to grow to around $70 billion by 2020.
• The White House and further US leadership are at the moment uninterested in keeping up with China, a decision that may be to their detriment in upcoming years.

Late Stage Research and Development Expenditure

• China surpassed the US in funding for late-stage research and development, where discoveries are developed into products.
• Currently, China spends twice the amount at this critical late-stage than the US does. As a result, while the US works on new technologies, China and other countries reap the benefits by turning these new ideas into products.
• This has cost the US billions of dollars in manufacturing output and hundreds of thousands of factory jobs in the last decade.
• An example of this is seen in the US development of drone technology, which was then taken by Chinese innovators and tweaked to further avoid obstacles. These innovators have now become the largest manufacturers of commercial drones.

Chinese Market Environment

• The Chinese market is a combination of daring entrepreneurs, a huge market, and adequate capital. As a result, market opportunities are readily sought out and innovations developed into new products.
•  Artificial Intelligence companies benefit from the fast pace of the Chinese market, being able to facilitate changes in their products quickly to increase profits. Products are quickly made, tested, altered and rebranded in the Chinese market, causing quality and functionality to surpass US competitors.
• The Chinese market readily accepts new products and ideas causing the size to increase at a large scale. With an increase in the popularity and ease of use of e-commerce, goods and services are easily exchanged. This also results in growth in the Chinese market size.
• China’s huge market size also allows the provision of enough returns to cover the costs incurred by implementing foreign technology or learning new and innovative technologies.
• The market size also allows them to take on very expensive technologies which tend to be the most innovative and high tech.

CHINA's USE of THE INTERNET

Artificial Intelligence (AI)

• Due to a lack of government and privacy constraints as is experienced by the US, China has surged ahead in the areas of artificial intelligence. As a result China is seen to dominate in areas of facial recognition and its use in industries such as security and the military.
• China is steps above the US in the use of artificial intelligence, such as a large amount of data they have collected as well as their large population. This leaves a great deal of room for innovations in surveillance technology.
• China does not have the same privacy policies as many other countries such as the US. As a result, they have been able to collect large amounts of data on the population, a big plus for the development of artificial intelligence.
• AI or machine learning is considered new age digital weapons and has the potential to change many industries. Some of these include security through facial recognition, transport through self-driving cars, or the medical field through more efficient instruments and machines.

E-Commerce and Big Data

• Without privacy constraints and safeguards, China has been able to surge ahead in the area of big data. A total of 31 of the US states have data privacy laws, protecting the sharing of personal data while at least 12 others have broad data security requirements. This is unlike China.
• In the last three years, mobile payments have emerged as the most popular method of payment in China. In 2017 $18.8 trillion worth of mobile payments were made. A larger amount than China’s GDP.
• The infrastructure on which these mobile payments are built is considered the best in the world with almost no transaction fee, micro-payment capability, and peer-to-peer payments.
• This use of mobile payment by so many consumers also increases the data pool for China. With a lack of security restraints, most data that are used online is stored by the Chinese government. As a result of the growing popularity of e-commerce and mobile payment, China is vastly increasing its data pool.

RESEARCH STRATEGY