China, once seen as an imitator when it came to technology, is now looking to take the lead in areas from blockchain to artificial intelligence (AI), much-hyped technologies that are seen as critical to the future.
Despite the U.S.-China trade war, experts say the world’s second largest economy will continue pushing its domestic technology sector.
The future of AI, blockchain, financial technology and smartphones will be among the topics discussed at East Tech West — CNBC’s technology conference held in the Nansha district of Guangzhou, China.
Here’s a look at what China is doing in some of the key technology areas.
Artificial intelligence
Artificial intelligence is a broad term for technology that makes machines mimic human intelligence, for example, in recognizing images or speech.
U.S. and Chinese tech firms are pumping a lot of money into developing AI, and both countries have launched their own national strategies around it.
In 2017, Beijing laid out plans to become the world leader in artificial intelligence by 2030, with the aim of making the industry worth 1 trillion yuan ($147.7 billion).
China has rolled out AI uses, such as facial recognition technology, on a large scale. The U.S. is seen as having the lead, however, when it comes to research and development.
“On AI, China is implementing the technology very fast in facial recognition, speed recognition, self-driving vehicles, smart cities and medical diagnoses,” Rebecca Fannin, author of “Tech Titans of China,” told CNBC.
“The US still ha
s the lead on R&D in AI, but China is catching up with the tech titans in AI as well as numerous well-funded startups such as Face++, Sensetime and iFlytek.”
“China is closing the technological gap with the United States, and though it may not match U.S. capabilities across the board, it will soon be one of the leading powers in technologies such as artificial intelligence (AI)” and other technologies, the Council on Foreign Relations (CFR) said in a recent report.
Fintech
In China, financial technology is booming. Global investment in fintech ventures more than doubled in 2018, to $55.3 billion, with China accounting for around 46% of that figure, according to Accenture.
The country is home to some of the world’s biggest fintech firms such as Alibaba affiliate Ant Financial which runs the popular Alipay mobile payments app.
Mobile payments — or paying with a scanned code on your phone — is one area in which China has led the way. Alipay and Tencent-owned WeChat Pay can be used all over the country from big department stores to street stalls.
But these services are also known as “superapps” because within the platform, users are able to get other products from micro-loans to wealth management products. They have provided a way for Chinese consumers to bypass the banks, to some extent.
“China’s mobile payment market is most advanced in the world. Alipay and WeChat Pay are two tech titans in this space,” Fannin said. “Cash is dead in China. So are credit cards.”
Henri Arslanian, chairman of the Fintech Association of Hong Kong, said that technology firms have been driving innovation in financial services, something he calls “techfin.”
“What’s been really interesting for us, is that the real innovation from a ‘techfin’ perspective happened not only in Silicon Valley, but really happened here in Asia, in China in particular,” Arslanian told CNBC in an East Tech West preview show.
“For many banks around the world, when they want to see what is the disruption coming ahead, what can really disrupt their business, they don’t look at Silicon Valley now, but they rather look at China and Asia.”
But Chinese fintech has often moved faster than the regulators. Now regulators are putting frameworks in place to have a better grasp on what’s going on to help China maintain a leading position in fintech.
Earlier this year, the China’s central bank issued a 3-year “fintech development plan” with the aim of making China the world leader in fintech.
Smartphones
Chinese firms are now some of the biggest in the world. Three out of the top 5 smartphone vendors are Chinese with Huawei sitting at number two.
Chinese smartphone-makers have for years been accused of copying the likes of Apple when it comes to smartphone designs. But in the past couple of years, they’ve begun to push the boundaries on handset innovation.
“Many Chinese vendors get plagued with reputations for being copycats. And while some of that is valid, what gets overlooked is how much these same vendors are oftentimes ahead of the rest of the industry in areas like cameras, screens, and charging,” Bryan Ma, vice president of devices research at IDC, told CNBC.
Ma pointed to devices like Xiaomi’s Mi CC9 which has a 108-megapixel camera and other devices from the company which have edge-to-edge screens.
Blockchain
Blockchain’s first major application was for the cryptocurrency bitcoin. It’s a so-called decentralized ledger of transactions that cannot be tampered with and it underpins bitcoin.
But the meaning and uses of the technology has evolved. It’s now being trialed and used by various industries from finance to the food industry.
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