The Forces Driving Chinese Manufacturing's Commitment to A.I. 1


China’s meteoric economic rise has many implications for the rest of the world. It means increased competition, market share loss, and more. One of the most interesting elements of China’s ascendancy is the nation’s commitment to embedding artificial intelligence (AI) within the world of manufacturing. In fact, automation, robotics, and machine learning are being used to drive down the costs of labor and increase productivity across the board.

A Change in Chinese Markets

Once, China was the go-to solution for manufacturing firms looking to save on the costs of labor and pad their profitability. That’s changing today. Writing about the role of AI in manufacturing, writer Perter Dorman recently observed:

“In manufacturing, capital investments are high and profit margins are often thin. Those conditions helped to drive a lot of manufacturing to low-wage countries, where the human-resource costs have been so low that the capital investment in AI and related automation was hard to justify. But rising living standards and wages in places like India have made AI an easier sell. In fact, China is already making significant investments in AI for manufacturing and e-commerce.”

What AI Investments Is China Making?

China is investing in AI in a big way, but what areas in particular is the nation focusing on, and why? One space is in machine sensing. Better sensing equipment, from force sensors to machine vision, ensures that robots and humans can work together, but also so that machines do not damage products, can sense and react to the world around them, and more.

China is also investing in supply-chain side AI. Imagine algorithms that are able to predict market demand, often before a product is even developed to satisfy a need. Imagine a world in which software handles supply across not just a single geographic region, but the entire globe.

Finally, China is betting big on information processing capabilities, as highlighted by The New York Times. The nation is already home to more data than any other, and now they are developing algorithms to parse, catalog, and make that data more usable to Chinese companies.

China’s AI Gamble May Pay Off Big Time

According to Zen Soo, writing for the South China Morning Post, “Artificial intelligence could add as much as 1.6 percentage points to China’s economic growth rate by 2035, with industries like manufacturing, agriculture, and retail seeing the most value from the technology.” In fact, predictions are that with the help of AI, China’s gross value added (GVA) will reach US $6.3 trillion by 2035.

It’s not just about building profitability, though. Zen Soo points out in her article that, “While AI technology will cause disruptions in China’s workforce, such as displacing manufacturing workers from factories as businesses favor robots and machines,” ultimately, the point of AI is to improve the quality of life human beings get to enjoy. More investment within artificial intelligence will actually create new jobs and raise the standard of living for Chinese workers.