China's Tech Surge: AI Warfare & Green Future
SEGMENT 1
Welcome to the China Update, where we summarize curated selections of the latest news on China from open sources and the Communist Party of China's official proclamations. We cover politics, the economy, society, technical innovations, cultural outreach, and international relations.
From the Editor:
Recently, I’ve seen a lot of posturing on Twitter and by the significant CCP English language outlets about enhanced relationships with Arab countries, Belt and Road successes pushing further into traditionally European spheres of interest, closer ties with Russia, and the displacement of the US dollar. That said, the old European colonial-era tripartite system of France-England-Russia has been replaced by a new tripartite system, with the European Union/United States, Russia, and China as the three legs of the global affairs stool.
I deeply admire much of what China has accomplished since the revolution, including massive infrastructure investment, strides in technical innovation, and a spirit of optimism. Compared to the United States internal strife, mass shootings, and political division, there is a stark contrast in each country’s respective media portrayals. Of course, these positive representations are heavily curated by China's societal controls and governing structures like the CCP. In any case, China is accelerating its pursuit of reducing Western dominance of global institutions, economic development, and social norms.
With that said, here are the articles I've submitted for your consideration in May 2023:
The next arms race: China leverages AI for an edge in future wars: China is investing heavily in AI and machine learning to strengthen its military. The nation's military-civil fusion strategy has fast-tracked defense innovations, allowing China to lead in numerous technological areas. The country aims to dominate AI globally by 2030, transforming warfare and presenting challenges like data integrity and reliability issues.
China updates military recruitment rules to prepare for a high-tech war: China has revised its military recruitment guidelines to emphasize readiness for a high-tech regional war. The new rules prioritize enlisting veterans capable of operating advanced weaponry, women, and previously demobilized soldiers. This is seen as a measure to prepare for potential conflicts in the Taiwan Strait.
China's investment in Europe falls to a decade low amid increasing scrutiny: Chinese foreign direct investment in Europe fell to a decade low in 2022 due to limited Chinese merger and acquisition activities and the EU's heightened scrutiny. Despite the decline, Europe remains a crucial region for China's electric vehicle investment, with greenfield investment surpassing M&A transactions for the first time in 20 years.
China’s carrier-based warplane development and pilot training programs enter the fast lane: China is accelerating its carrier-based warplane development and pilot training programs to celebrate its aviation force's 10th anniversary. This step underscores China's push to modernize its military technology and readiness for potential conflicts.
Experimental ultrahigh-speed maglev train line planned in Northeast China's Heilongjiang to run at 1,000 km/h: An experimental ultrahigh-speed maglev train line is planned in Northeast China's Heilongjiang, aiming to reach speeds over 1,000 kilometers per hour. The project, seen as a technological breakthrough, is expected to stimulate local economic growth and create new tourism opportunities.
SEGMENT 2
Section One: The next arms race: China Leverages AI for an Edge in future wars.
The US has long held military technology superiority, but China's focus on AI and machine learning (AI/ML) quickly erodes this advantage. China aims to integrate AI/ML into the People's Liberation Army, creating a "world-class" force to offset US military supremacy in the Indo-Pacific. China's military-civil fusion strategy has allowed it to expedite defense innovations by breaking down barriers between civilian research, commercial sectors, and military industries. As a result, China leads in research output in 37 out of 44 critical technological areas.
China aims to become the world's leading AI power by 2030. It's also known for its data collection and algorithm development. AI/ML technologies offer various tactical and strategic applications, such as autonomous systems, accelerated data analysis, disinformation operations, intelligence gathering, and cyberattacks.
AI/ML technologies can enable, multiply, and disrupt military forces. They can improve situational awareness, intelligence capabilities, and decision-making processes and support planning for military operations. AI/ML technologies are also integrated with robotics, drones, and cyber operations. However, these emerging technologies bring uncertainties, such as data integrity, bias, and reliability issues, which may lead to unforeseen consequences. The rapid progress in AI/ML technologies has initiated a new arms race, and the balance of military-technological power may soon shift from West to East with potentially unforeseen consequences.
Section Two: China updates military recruitment rules to prepare for a high-tech war.
China has updated its military recruitment guidelines, emphasizing "preparations for war" and enlisting skilled personnel, including former soldiers. This change is due to Beijing's need for troops ready to fight a high-tech regional war. The new recruitment rules prioritize enlisting veterans capable of operating advanced weaponry to reduce training time and costs.
The amendments to the recruitment guidelines provide for broader mobilization, recruiting women and previously demobilized soldiers if necessary. The objective is to attract reservists with prior training and experience and fresh graduates to join the People's Liberation Army's (PLA) existing 2 million active personnel.
Beijing's focus on recruiting highly skilled soldiers reflects its concerns over potential conflicts in the Taiwan Strait. In addition to facing Taiwan's armed forces, China may need to confront the United States, Japan, and South Korea in such a conflict. Moreover, China would require troops to maintain domestic stability.
Experts believe the updated recruitment rules are designed to strengthen the PLA's capabilities in high-tech combat, considering the possibility of a war in the Taiwan Strait. The PLA needs to be prepared for war against multiple enemies, including powerful allies of Taiwan.
Former PLA Lt. Col. Yao Cheng stated that China needs recruits capable of operating high-tech weaponry, and re-enlisting former military personnel can help achieve this goal. China can cut training time and costs by recruiting veterans, allowing for faster military preparedness.
According to Kung Hsiang-sheng, an associate researcher at Taiwan's Institute for National Defense and Security Research, the rules aim to bolster the PLA's active personnel by attracting reservists with previous training, experience, and recent graduates. Kung also suggested that China's focus on recruiting high-quality soldiers is related to its concerns about a potential conflict in the Taiwan Strait.
The updated guidelines allow for a broader scope of mobilization during wartime, recruiting women and previously demobilized soldiers who meet the requirements. Furthermore, there is a provision for qualified recruits to join as sergeants.
With the new recruitment rules, China can potentially mobilize a large army relatively quickly. According to Yao, China's standing army could reach 30 million with various levels of training and readiness, with approximately 10 million ready for combat.
However, Yao also mentioned that many in the PLA are reluctant to fight, and the army needs esprit de corps. He contrasted this with Taiwan, where citizens would be highly motivated to defend their democratic way of life against an invasion by the Chinese Communist Party.
The new recruitment guidelines have generated discussions on Chinese social media, with many expressing anti-war sentiments and reluctance to participate in an invasion of Taiwan. Some comments suggested that high-ranking officials and their families should be the ones to fight for the country.
China's updated military recruitment rules reflect its strategic focus on high-tech warfare and the need to prepare for potential regional conflicts. By emphasizing the enlistment of skilled personnel and the possibility of broader mobilization, China aims to strengthen its military capabilities and readiness.
Segment 3
Section Three: China's investment in Europe falls to a decade low amid increasing scrutiny.
Chinese foreign direct investment (FDI) in Europe fell to a 10-year low in 2022, reaching €7.9 billion ($8.68 billion), a 22% decline year-on-year. The Rhodium Group and MERICS attribute this drop to limited Chinese merger and acquisition activities and the EU's heightened scrutiny of Chinese investment. Despite the downturn, Europe has become a critical region for China's electric vehicle investment, with greenfield investment surpassing M&A transactions for the first time in 20 years, hitting €4.5 billion or 57% of the total.
The EU's tightened scrutiny and barriers on regular business cooperation, fueled by security concerns, have contributed to the decline in Chinese investments. Additionally, mounting US pressure for "decoupling" from China and certain EU politicians advocating reduced economic dependence on China have negatively impacted bilateral trade and investment. Europe's slow economic growth and financial tightening have also affected foreign investors' confidence.
However, China's new-energy sector has experienced rapid development, with installed capacity of renewable energy sources leading the world and electric vehicle production and sales accounting for around half of the global total. The increase in greenfield investment, a type of FDI where a company establishes factories in another country, has primarily been driven by large-scale projects in the automotive sector. Chinese battery giants CATL, Envision AESC, and SVOLT have invested in building battery plants in Germany, Hungary, the UK, and France.
As the EU seeks a green energy transition, the Chinese new-energy sector's development presents an opportunity for collaboration. Experts suggest that investment demand between China and the EU remains strong, particularly in energy transition, green development, digital economy, and trade, and calls for closer bilateral ties. Increased investment from other foreign countries could stimulate Europe's economy. However, experts maintain a wait-and-see attitude regarding the growth prospects of China's investment in Europe. China-EU relations may not improve in the short term due to US anti-China policies and pressure on the EU. Instead, China may increase investment in friendly Southeast Asia and Middle Eastern countries.
In 2022, Chinese foreign direct investment (FDI) in Europe plunged to a 10-year low of €7.9 billion ($8.68 billion), reflecting a 22% year-on-year decrease. The downward trend, marking a return to 2013 levels, was primarily driven by a lack of Chinese mergers and acquisitions, with Tencent's acquisition of Sumo Digital being a notable exception.
The EU's stringent scrutiny of Chinese investment and enhanced barriers to business cooperation, ostensibly due to security concerns, have contributed to this decline. This restrictive environment has been exacerbated by mounting US pressure for decoupling from China, leading some EU politicians to advocate reducing economic dependence on China, thereby negatively impacting bilateral trade and investment.
Europe's economic slowdown and financial tightening have further undermined foreign investors' confidence. However, despite these adversities, Europe remains a critical region for China's investment, especially in the electric vehicle sector. Encouraged by electric vehicle battery factories, Chinese greenfield investment – involving the establishment of new factories and direct contributions to the local economy – in Europe exceeded M&A activities for the first time in two decades, accounting for 57% of the total Chinese FDI.
The EU has preferred greenfield investments, particularly as the bloc seeks a green energy transition amid the Russia-Ukraine conflict. Large-scale projects in the automotive sector, such as those led by Chinese battery giants CATL, Envision AESC, and SVOLT, have driven this greenfield investment surge.
China's new-energy sector has increased, with its renewable energy capacity and electric vehicle production leading the world. As the Chinese economy recovers, outbound FDI is expected to grow. However, China-EU relations might improve slowly due to the US's anti-China policies and pressure on the EU, leading to a cautious outlook on China's European investment prospects.
Despite these challenges, China may boost investments in friendly countries such as Southeast Asia and the Middle East. Official data revealed a 26.3% year-on-year increase in China's non-financial outbound direct investment in the first quarter, reaching ¥215.97 billion ($31.19 billion).
The demand for investment between China and the EU remains robust, particularly in energy transition, green development, digital economy, and trade. Chinese investment could significantly stimulate Europe's economy and has called for closer bilateral ties.
Segment 4
Section Five: Experimental ultrahigh-speed maglev train line planned in Northeast China's Heilongjiang to run at 1,000 km/h.
The world's first experimental ultrahigh-speed maglev train, capable of reaching over 1,000 kilometers per hour, is set to be constructed in Harbin, Heilongjiang Province, Northeast China. The initiative is backed by Beijing-based transport technology firm World Artery and the Harbin Industrial Investment Group Co (HGT). In addition to the maglev train, the project includes constructing associated products related to the route.
The maglev line's centerpiece is a partial-vacuum-status transportation tube, enabling the train to reach its exceptional speeds safely and at a relatively low cost. This innovative design represents a significant technological leap, translating a cutting-edge concept into reality.
World Artery's President, Zheng Bin, hailed the project as a breakthrough in the field, foreseeing its positive impact on local tourism. As stated in a recent press release, the experimental project aims to bolster the local economy and create new tourism opportunities.
Under a collaboration agreement signed recently, World Artery and HGT will jointly construct the transportation tube and associated manufacturing facilities. HGT will facilitate construction registration, attract investment, and provide policy consulting. On the other hand, World Artery will contribute its expertise in construction technology, related patents, and other valuable resources.
The maglev train project in Harbin is expected to be a significant technological advancement, pushing the boundaries of transportation speed and efficiency while also catalyzing regional economic growth and tourism.
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