China and Artificial Intelligence: The Cold War We’re Not Fighting

By Arthur Herman | Hudson Institute | June 19, 2024

The public and the media are right to worry about a future dominated by artificial intelligence. But the threat is not coming from Silicon Valley, Big Tech, or the Deep State. It’s coming from Beijing, and much more than the runaway development both of artificial intelligence and machine learning (ML) is at stake. The fate of societies and economies founded on Western liberal principles hangs in the balance—a future that Beijing and the Chinese Communist Party want to replace with their own totalitarian template. And that even includes a new definition of what it is to be human.

While Americans worry about whether AI and ChatGPT will enable students to cheat on their term papers or generate deep-fake videos of President Biden or Donald Trump, China has been steadily moving ahead with its own plan for this advanced digital technology. While the AI industry in this country remains focused on commercial advantage and market share and is diffused and dispersed throughout more than 67,000 companies large and small, China’s efforts in AI are centralized and regimented and entirely focused on a larger agenda.

Americans have had some exposure to China’s ruthless use of new technologies from human-rights advocates who detail how they are being used to oppress China’s Muslim Uighur minority. One of the reasons for alarm at the effectiveness of the Chinese-owned TikTok is that its algorithm owes its speed and effectiveness to AI, while TikTok’s data-gathering can provide valuable grist for the Chinese government’s AI mills.

China’s recent announcement about mass-producing humanoid robots by 2025 also raised alarms, since these are devices that will be largely driven by AI.

Thus, even as anti-AI activists in the U.S.—among them some of the technology’s original innovators—were calling for a moratorium on research a year ago, China was paving the way toward an AI-dominated future none of us wants. For the past seven years, China has been moving ahead with its plans to become the world’s AI superpower. This includes building the next high-tech industrial revolution for victory on the battlefield and creating a total surveillance multiverse.

China is ramping up AI investment, research, and entrepreneurship on a historic scale. Its generative AI spending is set to reach 33 percent of the world’s AI investment by 2027, up from 4.6 percent in 2022. Those investments will probably reach $13 billion by then, according to a new report from research firm IDC.

Money for AI start-ups is pouring in from Chinese venture capitalists, tech juggernauts, and the Chinese government. Chinese students have become adept at AI, enrolling in advanced-degree programs and streaming lectures from international researchers on their smartphones. Start-up founders are furiously pivoting, reengineering, or simply rebranding their companies to catch the AI wave.

We’ve never faced an opponent like this, with the will and the means to transform the world into what it wants. The Soviets tried it during certain phases of the Cold War, but they never had the scientific, technological, or economic means to carry it out.

China does. Indeed, what is happening to the Uighurs is just the first bitter sip from the cup that Beijing and President Xi have in store for the rest of us.

Yet without understanding the larger context, and the origins of China’s obsession with AI as a means of social and political control and of remaking the world in China’s image, the true extent of the threat remains opaque—and our ability to respond constrained.

On May 25, 2017, the world changed. That was the day a boardgame-playing AI Google product called AlphaGo AI defeated Chinese champion Ke Jie in the national game of go. AlphaGo had scored its first high-profile victory in March 2016 during a five-game series against the legendary Korean player Lee Sedol, winning four to one. While barely noticed by most Americans, the five games drew more than 280 million Chinese viewers. Overnight, China was seized by AI fever. The buzz didn’t quite rival America’s reaction to Sputnik, but it lit a fire under the Chinese technology community that has been burning ever since.

The government in Beijing took no chances when AlphaGo came to play Ke Jei. Media coverage was banned—China did not want to risk the national humiliation of having its champion lose to Google’s DeepMind division in real time. So most Chinese viewers were not allowed to watch the match live. Beijing even went as far as issuing a censorship notice to broadcasters and online publishers, warning them against livestreaming the match, according to China Digital Times. The notice said, “Regarding the go match between Ke Jie and AlphaGo, no website, without exception, may carry a livestream.”

But on May 25, AlphaGo didn’t just beat Ke Jie—it systematically humiliated him. During three matches lasting more than three hours each, Ke tried every approach he could think of: conservative, aggressive, defensive, even wildly unpredictable. Nothing worked. AlphaGo seemed to anticipate his every move, as it slowly squeezed him out of the picture.

For Chinese observers, the moment was galvanizing, and the government mobilized the nation to dominate this new technology. Instead of being intimidated, China’s Communist Party leadership saw the future not as something to fear but something to seize. And not even two months after Ke Jie resigned his last game to AlphaGo, the Chinese central government released its New Generation Artificial Intelligence Development Plan.

It called for greater funding, policy support, and national coordination for AI development. It also set clear benchmarks for progress by 2020 and 2025 and projected that by 2030 China would become the center of global innovation in artificial intelligence—leading in theory, technology, and application.

Already in 2017, investors had responded to that call, pouring record sums into artificial-intelligence start-ups and making up 48 percent of all AI venture funding globally, surpassing the United States for the first time.

President Xi has set aside $150 billion in government funding to make China the first AI-driven nation, which includes building a massive police-surveillance apparatus powered by Big Data and artificial intelligence. At the same time, the Chinese military has been seeing its future in an AI battlefield.

Jin Zhuanglong, head of the Ministry of Industry and Information Technology, said in a January 2024 interview that the government has four major targets this year: 1) Accelerate the transformation and upgrading of traditional industries; 2) consolidate and improve the leading position of advantageous industries; 3) actively foster emerging industries and industries of the future, and 4) promote new industrialization enabled by artificial intelligence.

These all have military applications. The Chinese are working toward fully automated shipyards, both for shipbuilding and unloading cargo. And AI is already being helpful in warship design. Military marine architects used an artificial-intelligence app to design the electrical layout of a warship, and they did it with unprecedented speed and accuracy. It took the AI designer roughly a day to complete work that would normally take a human team a year, according to the South China Morning Post.

Hudson Institute scholar Koichiro Takagi sees the Chinese military’s interest in AI research and applications centering on four main areas (bearing in mind that under Chinese law, anything that private companies develop in AI automatically belongs to the People’s Liberation Army).

One area is the autonomy of unmanned weapons, including the development of drone swarms, about which more later.

The second is processing large amounts of information through machine learning. For example, the People’s Liberation Army (PLA) is building a network of unmanned weapons and undersea sensors in the waters surrounding China to gather data it can analyze with AI/ML.

The third is using AI to speed up military decision-making, including what’s called “strategic reasoning.” AI can sift through multiple options for actions on multiple fronts and domains to arrive at an optimal solution—something that would take a human-led council of war hours, even days, to achieve.

Fourth is the military’s interest in cognitive warfare, or actively influencing the brain and neurological systems of their human opponents, to shape the enemy’s will to fight or subdue an opponent without a fight. (The most science-fictional of the four, it is the one about which we have reason to be skeptical, at least for the present.)

But probably the most striking and notorious developments within the Chinese AI monolith today are AI’s applications for the total surveillance state.

China is building a burgeoning panopticon with more than 500 million surveillance cameras deployed nationwide as of 2021—which accounts for more than half of the world’s surveillance cameras.

As analyst Paul Scharre has noted in the Los Angeles Times, Beijing is pouring billions of dollars into projects such as the Skynet and Sharp Eyes surveillance networks and its “social credit system”—scoring ordinary people and rewarding them for their fidelity to the rules. This gives the central government a much larger role in China’s AI industry than the role Washington plays in the industry here.

China now requires that train passengers show national IDs to buy tickets, which allows the government to block human-rights activists or anti-corruption journalists from traveling. In Xinjiang Province, home of China’s oppressed Uighurs, the government uses AI-sifted Big Data and facial recognition to scrutinize anyone entering a mosque or even a shopping mall, thanks to the thousands of checkpoints requiring a national ID check-in.

China’s use of AI in human-rights abuses has been glaring in the case of ethnic Uighurs in Xinjiang, who are subjected to tools such as face, voice, and even gait recognition. Under the Strike Hard Campaign, the Chinese Communist Party has built thousands of police checkpoints across Xinjiang and deployed 160,000 cameras in the capital, Urumqi. Facial-recognition scanners are set up at hotels, banks, shopping malls, and gas stations. Movement throughout the province is tightly controlled through ID checkpoints that include face, iris, and body scanners. Police match the obtained data against a massive biometric database consisting of fingerprints, blood samples, voice prints, iris scans, facial images, and DNA.

Even more significant than the use of this technology to control and repress the Uighur minority is the data collected, which AI companies can use to further train and refine their algorithms.

Some groups—PBS, Electronic Frontier Foundation, and the Center for Strategic and International Studies—have suggested that China is using Xinjiang as a testing ground for its advanced facial-recognition software and alert systems. This software, which can be covertly positioned in traffic lights and elsewhere, collects biometric data in real time as people walk through the streets and go about their day. It tracks people and deposits information into a comprehensive database to identify a person by name, address, and other state records. This surveillance has been used to restrict the free movement of people, particularly Muslims, by quartering them to their homes or specific parts of an area, like a neighborhood.

As the Center for International Human Rights reported in October 2022: “The use of AI has not been limited to external forms of surveillance like security cameras. The Uighurs and other groups have also been forced to download apps to their phone that help law enforcement to monitor online behaviors. For example, the apps search through text messages and internet searches for mentions of Quran verses or donations to a mosque, and even staying off social media can raise suspicions. Such acts can result in an indefinite holding at a detention center.”

Human Rights Watch (HRW) was able to discover and reverse engineer one of the apps that police in Xinjiang use for surveillance. Called IJOP or Integrated Joint Operations Platform, it includes among its functions geo-location and mapping, information searches using personal data, facial-recognition features, and Wi-Fi detecting. HRW’s findings indicate that the wide collection of data, ranging from DNA samples to the color of a vehicle, has been used to set up alerts for foreign nationals and people found to exhibit such behaviors as spending time abroad, having certain types of content on their phone, or simply using large amounts of electricity.

Once the app’s algorithm identifies such behavior, it then triggers an alert to law enforcement that prompts an investigation. This feeds directly into an AI-driven system called the Supreme Court Information Center that oversees application of Chinese law in specific cases across the country.

About six years ago, the project was little more than a database. No longer. Now it has become a rule of the Supreme Court that judges follow the advice of the AI system and, if they do not follow it, provide a written justification that is included in the case documents.

According to the Supreme Court, the system learns from 100,000 cases every day and monitors them for possible wrong decisions or corruption. In addition to court records, the system is said to have access to the databases of police, prosecutors, and government agencies.

For example, the AI is expected to help enforce sentences “by finding and seizing the property of a convict almost instantly and putting it up for online auction.” Combined with China’s social-credit system, it can deny debtors access to transportation, hotels, or other social services, and enforce the ban.

“The smart court SoS (system of systems) now connects to the desk of every working judge across the country,” said Xu Jianfeng, director of the Supreme Court Information Center. For the central government, this ensures that all law cases in China conform to its ideological direction. For those unfortunate enough to be caught in its grip, it means no judge or law-enforcement official dares exercise his or her independent judgment in adjudicating a case.

As noted above, the Chinese military sees much bigger game in its uses of AI. The Ministry of National Defense has established two major institutions, the Artificial Intelligence Research Centre and the Unmanned Systems Research Centre, that are focused on AI and unmanned-systems research and development.

The PLA’s most important military think tank, the Academy of Military Science, has also updated its doctrine to cope with AI technological development. Its job is driving defense innovation and ensuring that the war-fighting theory and doctrine of the PLA take full advantage of disruptive technologies such as AI as well as autonomous systems.

As already noted, papers that have been published so far by PLA senior officials and strategists show that the PLA is seeking to use artificial intelligence in four main areas. One is the autonomy of unmanned weapons, including the development of swarms of numerous drones. China aims to conduct highly autonomous integrated operations with a variety of unmanned systems and unmanned weapons. In addition, the PLA is rapidly expanding its use of unmanned weapons, first entering the airspace south of Taiwan’s Air Defense Identification Zone in September 2022, with the number of intrusions increasing to a total of 70 by December of that year.

Among all the AI technologies, China places the top priority on unmanned combat systems and equipment, along with other advanced military innovations. As the war in Ukraine has demonstrated, unmanned technology has been rapidly changing the face of warfare: Some have even dubbed it the most recent revolution in military affairs, akin to the advent of gunpowder. Unmanned equipment is also one of the first options that military leaders are looking to for future combat equipment.

Since President Xi took office, he has emphasized the importance of unmanned systems for China’s future dominance. In 2020, when he met students at the Chinese People’s Liberation Army Air Force Aviation University, Xi declared, “Drones are profoundly changing war scenarios. It is necessary to strengthen drone-combat research, education and training, and accelerate the training of drone pilots and commanders.”

The revolution brought by unmanned systems expands exponentially with AI and machine-learning applications, especially when military operations and strategy depend more and more on the gathering and interpretation of information, at which AI and unmanned systems excel.

Moreover, under civilian-military fusion rules, communication and coordination regarding AI innovation resources are the norm among scientific-research institutes, universities, enterprises, and military-industry units. New joint laboratories are also being stood up to enhance collaboration between civilian institutes and the military establishment.

For example, North China University of Technology and the equipment departments of the PLA’s army, navy, and rocket force founded the Military-Civil Fusion Intelligent Equipment Research Institute. Tsinghua University has its Military-Civil Fusion National Defense Peak Technologies Laboratory. Meanwhile, the Chinese military is helping itself to a smorgasbord of the latest AI-enabled products from private companies. To take just one example, the PLA’s surveillance and image-processing systems are reinforced by intelligent security monitors produced by Hikvision.

The second area of PLA interest in AI is in pro-cessing large amounts of information through machine learning. As of this date, the PLA is building a network of unmanned weapons and undersea sensors in the waters surrounding China, using AI to process the information obtained from this network. As Hudson’s Takagi notes, “The PLA is considering a new form of electronic warfare that uses artificial intelligence to analyze received radio waves and to optimize jamming.”

The third area is accelerating the decision-mak-ing process on and off the battlefield by employing AI. There is considerable debate, even in China, regarding the perils of handing over key aspects of decision-making to “smart” machines. For example, those in Chinese military circles worry about using artificial intelligence for decision-making in nuclear strategy, which might precipitate a nuclear confrontation faster than human reflection and judgement can process, or stop.

For now, however, experts agree that the PLA will likely stick to AI for processing masses of information and data, and guiding drones and other autonomous weapons, not complex decision-making. As China’s confidence in the capabilities of AI grows, however, it is likely that more and more decision-making will be passed along to AI support systems, including within its Rocket Force, which oversees China’s nuclear arsenal.

“In 2005, the U.S. State Department publicly stated the U.S. assessment that China also operates an offensive biological weapons program, specifically identifying two Chinese entities as likely involved, one of which is the Fifth Institute,” a U.S. intelligence report released by the House Intelligence Committee stated, as quoted by the Indo-Pacific Centre for Strategic Communications. “In a 2006 declaration of compliance with the Biological and Toxic Weapons Convention, China acknowledged that the Fifth Institute specifically researches SARS coronaviruses.”

The report also mentioned the book The Unnatural Origin of SARS and New Species of Artificial Humanized Viruses as Genetic Weapons, which was published by Chinese military experts in 2015, and which describes how to create weaponized viruses for use by the military.

The revelations about the PLA’s keen interest in weaponizing viruses sheds an ugly and sinister light on the current debate about the origins of the Covid virus. And not only that. The government’s and military’s fascination with biotech and their interest in AI/ML are converging.

For example, also in 2015, then-president of the Academy of Military Medical Sciences He Fuchu insisted that biotechnology will become the new “strategic commanding heights” of national defense. Since then, Fuchu has become vice president of the Academy of Military Sciences, which leads China’s military science enterprise.

Zhang Shibo, a retired general and former president of the National Defense University, has named biology as one of seven “new domains of warfare.” In the wake of Covid and the possibility that the virus in the Wuhan lab was being developed for biowarfare purposes, these matters need to be taken very seriously.

In all these cases, AI applications can be useful for not only identifying but manipulating and attacking an entire category of persons or groups through targeted viruses and diseases. This is because, at the most basic biological level, DNA itself is nothing more than data—data that can be exploited using AI and machine learning.

In that sense, the combination of China’s earlier interest in biotech and its obsession with advancing artificial intelligence may allow China’s military and intelligence services to develop comprehensive digital profiles of specific individuals, nations, and races—a form of high-tech racial profiling that a Himmler or a Mengele might have only dreamed about. By targeting specific weaknesses within a population’s genomic makeup, it might be possible to develop weapons that could harm a specific subpopulation or race.

Even more frightening, scientists at the Suzhou Institute of Biomedical Engineering and Technology are using mouse embryos to develop ways to provide key growth information to an AI caretaker, which can then rank the embryos in terms of overall health and genetic potential—enabling researchers to manipulate the growth of embryos to achieve optimal results. In short, the Chinese vision of AI includes a new paradigm for genetic engineering, conducting eugenics on a massive high-tech scale.

The key question is: What can the United States do to confront this nightmarish threat?

Advocates for international standards for the technical and ethical development of AI had hoped that international, multilateral, scientific, and standard-setting bodies could somehow restrain China’s voracious AI appetite. In their 2022 book The Age of AI, the late Henry Kissinger and former Google CEO Eric Schmidt argued for similar international constraints on the growth of AI for not only China but also the United States—comparing the race for AI supremacy to the race for nuclear weapons in the Cold War.

China’s surge in AI research and deployment since then has made those hopes seem even more illusory than they were in 2022. Indeed, China has been increasingly active in those same international standard-setting bodies. In 2019, leaked documents from the UN telecommunication union’s standards process—which directly affects 193 member states—revealed how China was setting the norms for rules governing facial-recognition applications that would only facilitate Chinese-style norms of surveillance, e.g., ones that could be used for malicious profiling by the PLA or other Chinese agencies.

Meanwhile, Stanford University’s AI Index, which assesses AI advancements worldwide across various metrics in research, development, and the economy, ranks China among the top three countries for global AI activity. On AI research, for example, China produced about one-third of AI journal papers and AI citations worldwide in 2021. In economic investment, China accounted for nearly one-fifth of global private-investment funding in 2021, attracting $17 billion for AI start-ups. Tencent, Huawei, and Alibaba are already among the top 10 global companies in AI, as a recent Nikkei study showed.

Some in the U.S., including the authors of the most recent McKinsey report on AI investment, have concluded that “there is tremendous opportunity for AI growth in new sectors in China, including some where innovation and R&D spending have traditionally lagged global counterparts: automotive, transportation, and logistics; manufacturing; enterprise software; and healthcare and life sciences” (my emphasis). Overall, McKinsey has seen “clusters of use cases” in which AI can create upwards of $600 billion annually in economic value for China—that’s roughly equal to the city of Shanghai’s entire contribution to China’s GDP.

While some, including U.S. allies, may see these clusters as investment opportunities, more alert observers should recognize that all of China’s AI research and development is aimed at one goal: advancing China’s global hegemony. This includes enabling other, similar regimes to survey and control their own citizens. As David Yang, a professor of economics at Harvard, notes, “Autocratic governments would like to be able to predict the whereabouts, thoughts, and behaviors of citizens. And AI is fundamentally a technology for prediction.”

Yang’s research shows China exporting huge amounts of AI technology, amounting to much more than its contributions to other frontier-technology sectors such as quantum or even unmanned systems. “To the extent that [Chinese] technology is exported,” Yang concluded, “it could generate a spreading of similar autocratic regimes to the rest of the world.”

And so an intentional pause on American AI development would “absolutely” give China an advantage, as Sultan Meghji, a professor at Duke University’s Pratt Engineering School, said in a recent interview with Newsweek. China is “investing massive amounts of money in AI, we are already to a degree struggling to keep up,” Meghji said. “This is one of the biggest competitions in technology right now and we should be accelerating our investments in AI.”

Still, the U.S. is currently the global leader in AI technology, especially in innovation and cross-cutting applications. Yet while commercial AI expands exponentially, the U.S. government has to deal with the technology through the prism of government funding and directed research. Our government operates in an environment that is the opposite of civilian-military fusion. Tech companies proficient in AI/ML have to be coaxed, not coerced, into supporting government or Pentagon uses of AI. In fact, private companies can still exercise veto power over participating in specific government programs, as happened when Google employees refused to participate in a defense project to develop facial-recognition software to identify terrorists. Google had to back out of the project.

This is all the more reason why the United States needs to develop an overall AI strategy that aims not just at countering China’s moves in AI but advancing American AI supremacy.

Which nation wins this struggle will ultimately depend on which one has the clearest idea of what it’s doing, and where it’s going. The Chinese clearly do, and theirs is a vision that is more frightening, and potentially more catastrophic for human freedom, than anything dreamed up by science fiction.

Of course, there are unknown risks with AI, as with any disruptive technology. It’s also clear that, unlike the Chinese, Americans still don’t know where we are going with AI, or specifically how to get there—at least not yet. But the time to figure out the answers, and to set a course for achieving them, is growing short.

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