The Chinese economy has entered a new era of tech sector dominance on the back of the artificial intelligence (AI) boom, with jobs involving AI overtaking bankers, fund brokers and traders as the highest paying in the country.
The sea change comes after a shift in national priorities – Beijing appears to have been caught flat-footed in the face of generative AI’s (GenAI) sudden, explosive awakening and is now scrambling to catch up.
A new OECD report published in May placed Chinese investment in AI at $91 billion, well ahead of the EU’s $45 billion but unable to rival the US’s massive $300 billion investment.
New technological arms race
The average pay for a new job in China is about 10,313 yuan per month. New recruits to AI jobs can expect more like 13,594 yuan per month, while sought-after AI software engineers are at the peak of the job market, drawing monthly salaries as high as 21,124 yuan.
“Recruitment in this sunrise sector is characterised by high technology, high education, a high [experience] threshold and high salaries,” Chinese employment site Zhilian Zhaopin said.
“The pay level of engineers and technical positions in algorithms, C [programming] language, embedded software development and machine visuals is particularly high.”
The percentage of top AI researchers based in China rose from 29% in 2019 to 47% in 2022, a sign that the country is retaining talent domestically – only 42% of top-tier AI workers were working outside of their countries of origin in 2022, a more than 12% drop since 2019.
“Chinese companies are under tremendous pressure to keep abreast of US innovations,” Chris Nicholson, an investor with the venture capital firm Page One Ventures who focuses on AI technologies, told the New York Times.
According to him, the release of ChatGPT was “yet another Sputnik moment that China felt it had to respond to”.
On the back foot
Chinese companies are currently using open-source versions of large language models (LLM) rather than developing their own due to the massive investment necessary to build these AI systems from the ground up.
“Not too many companies can support their own large language model. It takes a lot of capital. Silicon Valley is definitely well ahead of the game,” Jenny Xiao, a partner at AI VC firm Leonis Capital in San Francisco, told CNBC.
“Many of the China models are effectively forks of Llama and the consensus is that these forks are one to two years behind the leading US companies OpenAI and its video-to-text model Sora,” said Rui Ma, an AI investor and co-founder of investment syndicate and podcast TechBuzz China.
China intends to become the world leader in AI by 2030, with the goal of building a domestic industry worth $150 billion.
The country is about halfway to that number at present; Beijing says its goal is to “become the world’s premier artificial intelligence innovation centre,” and “foster a new national leadership and establish the key fundamentals for an economic great power.”
With AI-driven cybercrime on the rise, and a looming trade war over semiconductors, battery metals and AI infrastructure brewing between China and the US, the next few years may look like something of a digital arms race.