Track II: China's access to Big Data fuelling tech boom

The trip allowed participants an opportunity make connection with Chinese colleagues working in similar fields

I remember my first train trip in China. It was the winter of 1989 and I took the slow train, Xian to Guangzhou, crammed into old carriages, the tannoy playing loudly from 5am to midnight, wrapped in a fug of cigarette smoke, as we worked our way achingly slowly south. For a backpacker, it had the great advantage of being cheap. Slow, days and days slow, but cheap.

Fast forward 28 years and a lifetime in China’s rapid modernisation and I was on a Track II delegation, organised by the Asia NZ Foundation, to meet economists and discuss China’s economic future. But first up it was the trains I wanted to see. Hangzhou to Shanghai in 45 minutes. Top speed 303km per hour. No smoking, no fug. Barcode tickets on your smartphone, not cardboard cut-out tickets.

Obvious as it sounds, I was struck by the scale of China’s technological leap and its ambitions to leap further and faster. We did, after all, visit Hangzhou, one of the Silicon Valleys of China, and the home to Alibaba its e-commerce giant which, along with Tencent, Baidu and a host of ambitious tech firms, are remaking everything from transport to artificial intelligence. Beijing’s “Made in China 2025” strategy aims to make it the technology leader in 10 sectors within seven years, including robotics, artificial intelligence, high-tech shipping, power equipment, medicine and, yes, modern trains.

During the delegation visit, I was struck by the depth of discussion of artificial intelligence and Big Data in the English-language media. The Global Times and China Daily covered developments in voice recognition technology, a robotics conference, data warehousing initiatives and artificial intelligence breakthroughs. Economists we spoke to checked it as a priority. China estimates that by 2035 artificial intelligence could be worth $US 59 billion to the economy.

Beijing’s “Made in China 2025” strategy aims to make it the technology leader in 10 sectors within seven years

Chinese tech firms have a number of advantages. First, is the scale of the internal market where some 90% of consumers have a smartphone, it is estimated. Second, a pool of trained data programmers and engineers - and a commitment by the government to train more. Lastly, and perhaps most importantly, access to government data. Despite a new cybersecurity law coming into force just weeks before we arrived, there are far fewer constraints on accessing huge reserves of data. Data releases that might cause pushback in the West, don't face the same resistance in China.

We witnessed one such data mining experience, a joint venture between Alibaba and the local government, as we drove through Hangzhou to the bullet train. Every traffic light was controlled using algorithms to speed up the flow of cars and buses, based on the data of traffic journeys. As I understand it (and I may have mis-translated), data included the flow of cars (via cameras), buses (via cameras and GPS on board), movement of people (via mobile phone use) and share bicycles (via the booking apps and Alipay transactions).

In Hangzhou, Alibaba has launched a so-called “Nasa plan” to drive its artificial intelligence. (In many ways it is as much a data gatherer as it is an e-commerce platform.) It then tempted top scientist Ren Xiaofeng away from Amazon to be the chief scientist and leader of Alibaba’s Institute of Data and Technology. He was the lead at Amazon in setting up Amazon Go, using machine learning to set up an automatic checkout system. And he has the mandate to recruit heavily from among America’s data firms.

Being a leader in data, innovation and artificial intelligence will inevitably be challenged by other nations who see innovation as a cornerstone of prosperity, like the US, Germany or Israel. At its heart, much of the row with the US over trade practices, which erupted as we flew to China, revolves around patent protection and whether tech-savvy US firms must hand over their know-how in joint ventures to access the China market. For all its advantages, China will need to invest in rapidly evolving skills, innovation training and the technical infrastructure to match.

But, for now, you could see the tip of the data and e-commerce iceberg outside every office every day with the much-discussed share bikes. Chinese consumers simply use an app, linked to their Wechat accounts, then scan the bike’s lock with a QR code or a combination they are sent. A bond is taken using their Alipay system or Wechat account, and refunded when the bike is swiped back in. Simple.

There are now five times the number of share bikes in Hangzhou than in London

Of course, bikes are nothing new in China. When I visited in 1989, rush hour was a sea of black bikes. Today, the old iron bikes are still around but it’s the hundreds, thousands of share bikes that stand out. There are five times the number of share bikes in Hangzhou than in London. And every one of them is generating huge bites of data from millions of trips. All of it available to mine and use.

The Asia New Zealand Foundation leads New Zealand’s Track II engagement with Asia. ‘Track II’ is, essentially, engagement with thinktanks and experts in the region on issues and challenges of common interest. Participants in the Foundation’s delegations are drawn from those outside of Government who are actively considering these issues and their implications for New Zealand and its relationships in the region.