Can artificial intelligence grow China’s economy by 26% to 2030?
According to a research report released last Tuesday by PwC, China is due to see the “greatest economic gains from artificial intelligence (AI) by 2030”. This has the potential to boost productivity and consumption in the country, potentially growing its economy by a massive 26%.
AI has been dubbed the “fourth industrial revolution” by a number of analysts, and AI technologies are expected to increase global GDP by 14% to 2030. China’s bigger than average share of that growth is partly due to its position as the world’s second-largest economy, and also due to the incredible speed at which China is accommodating technological advances.
The report, which was delivered at the World Economic Forum’s annual June meeting in northeast China, said that labour productivity improvements would account for more than half of the $15.7 trillion gain in GDP worldwide between 2016 and 2030. That’s more than the current output of China and India combined. The additional growth will be supplied by increasing consumer demand, driven by “AI-enabled product enhancements”.
Anand Rao, global leader of artificial intelligence at PwC, said: “The analysis demonstrates how big a game changer AI is likely to be – transforming our lives as individuals, enterprises, and as a society.”
Almost every tech company in China has some interest in the AI phenomenon. Applications range from powerful search and recommendation algorithms used on Ecommerce sites like Alibaba, to self-driving cars, facial recognition, and increasing automation of jobs and services.
The triad at the top of China’s massive tech sector – Tencent, Baidu and Alibaba – has been trying to lure American talent from Silicon Valley according to the South China Morning Post. The U.S. is expected to experience the benefits of AI’s productivity gains before China, but as the Chinese market matures, PwC sees it pulling ahead within a decade. Overall, the U.S. can expect a GDP boost of 14.5% by 2030 – while China will see a 26% increase.
Chuan Neo Chong, the chairwoman of Greater China operations for global consultancy firm Accenture, agrees with PwC’s estimation. She told the South China Morning Post that: “China has already made great leaps in the development of AI and our research shows that AI has the potential to be a powerful remedy for slowing growth.”
Dominion holds Tencent, Baidu and Alibaba in its Global Trends Ecommerce Fund.
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