CIW News 11 Apr

AI Experts: China vs. USA

Author

Elaine Wong
April 11, 2024

CIW News is a weekly email newsletter on China tech trends.

The year 2023 marked a significant milestone for Tmall, one of China’s leading online retail platforms, with the emergence of over 4,100 brands each achieving annual sales exceeding one billion yuan, according to data shared at Tmall’s TopTalk conference.

This surge underscores a broader trend of digital marketplace evolution, characterized by innovative sales strategies, substantial investment in marketing and membership benefits, and a strategic shift towards personalized industry support.

The disclosed data from the conference revealed a commitment of 50 billion yuan to bolster cross-platform support, aiming to assure merchants of tangible growth opportunities.

With IDC forecasting GenAI-related IT spending to soar to $9.6 billion by 2027, understanding China’s distinct approach becomes crucial for tech vendors aiming to penetrate this lucrative market.

According to a report released by IDC on March 28, 2024, China’s investment in generative AI is witnessing accelerated growth, with a projected compound annual growth rate (CAGR) of 86.2% over five years (2022-2027).

IDC data reveals that in 2022, generative AI accounted for 4.6% of the total AI market investment in China. With the rapid development of generative AI technology, its investment share is expected to rise to 33.0% by 2027, exceeding $13 billion with a compound annual growth rate (CAGR) of 86.2%.

By December 2023, China’s ride-hailing user base reached 528 million people, an increase of 90.57 million from December 2022, accounting for 48.3% of China internet users, according to data from CNNIC.

In 2023, China’s ride-hailing companies experienced strong revenue growth and accelerated steps toward commercializing autonomous driving, marking a new phase in the industry’s development.

By December 31, 2023, a total of 337 ride-hailing companies had obtained operating licenses, up by 39 companies from the previous year. The ride-hailing regulatory information exchange system processed 9.114 billion orders throughout the year, a 30.76% increase from the previous year.

In August, Baidu Apollo’s autonomous driving service platform “Luobo Kuaipao” was officially launched in Wuhan’s Dongxihu District, providing citizens with autonomous driving services and achieving breakthroughs in cross-district travel and full unmanned night-time operations.

BRIEF BLASTS

🌦️ The Huawei Cloud and Shenzhen Meteorological Bureau have launched a regional AI weather forecasting model Zhiji for Shenzhen and its neighboring regions. It offers highly precise 5-day forecasts at a 3 km resolution, surpassing typical global models with a 25 km resolution. Zhiji demonstrated high accuracy during trials, particularly in predicting cold-temperature periods.

💼 China's economy is forecasted to grow by 5.3% this year. Property sector stabilization and improving external demand are driving factors. Challenges persist despite the initial improvements in economic activity.

💡 Fitch downgraded China's sovereign credit rating outlook to negative due to risks to public finances. Fitch predicts China's general government deficit to rise to 7.1% of GDP in 2024. Despite the negative outlook, Fitch affirmed China's issuer default rating at 'A+'. It forecasts China's economic growth to slow to 4.5% in 2024.

🌎 The European Union is enhancing its scrutiny of green technology projects to ensure their adherence to state aid regulations, aiming to prevent an unfair advantage for Chinese companies in the rapidly expanding clean tech sector. The increased oversight will involve more rigorous assessments of public funding allocated to green tech projects, ensuring that state aid is granted transparently and does not distort the market.

📱 Huawei's HarmonyOS Next aims to rival iOS and Android in China. Departure from previous Android-compatible versions signifies Huawei's determination to establish its own ecosystem.

💡 The growth of AI is concentrated in specific regions like Silicon Valley and Shenzhen, leading to economic disparities.

💡 Gen Z is fascinated with an amino acid called glycine, particularly due to a Chinese company's viral ads on TikTok.

💡 Donghua Jinlong Chemical, the Chinese company, has gained attention on TikTok for its energetic videos advertising glycine, a mundane compound. Glycine is an amino acid found in foods like tofu and has potential health benefits, but it's now being turned into an absurdist joke on TikTok. Fans of glycine humorously refer to themselves as "glycine girlies," showing the extent of the trend's popularity among Gen Z.