China rapidly closing gap with US and West on artificial intelligence and other areas, while lagging in chipmaking, finds US think tank

China is rapidly “closing the gap” with the US on artificial intelligence, with strong academic institutions and innovative research, a new study from a US think tank has found.

The study from the Washington DC-based Information Technology and Innovation Foundation (ITIF) found US efforts to slow down China’s progress in AI were “unlikely to work in the long run” and that the US needed instead to focus on measures to improve its own competitiveness.

The study analysed AI and nine other areas, including robotics, chemicals, nuclear power, semiconductors, display technologies, electric vehicles and batteries, quantum computing, biopharmaceuticals, and machine tools, finding China was on par with the US and its allies in the West or near the lead in many fields.

Semiconductor lag

China is ahead in nuclear power, on par in electric vehicles and batteries and near the lead in robotics, displays, artificial intelligence, and quantum computing, the study found.

But it lags in chemicals, machine tools, semiconductors, and biotechnology.

“Apart from semiconductors, where progress has been somewhat frustrated by export controls on equipment, and quantum, China’s rate of progress is striking,” the ITIF said.

The US has instituted export controls on chipmaking equipment to stymie China’s semiconductor industry and advanced AI chips to slow down the advancement of its AI progress.

New controls on ASML deep ultraviolet (DUV) chipmaking tools instituted by the Dutch government this month will also force the company to apply for a licence to service or sell spare parts for existing DUV machines sold to Chinese companies that have since come under restrictions, creating fresh challenges for China’s chip efforts.

The Chinese government criticised the Netherlands’ decision at the time, and last week touted two domestically produced DUV machines that it said “have achieved significant technological breakthroughs, own intellectual property rights but have yet to perform on the market”, according to the Ministry of Industry and Information Technology (MIIT).

AI research

ITIF’s report analysed data including published scientific articles, patents, talent and infrastructure, finding China’s academic foundations, talent pool and state-backed funding were turning it into a strong competitor to the West in AI.

China led the world in AI research publication from 2017 to 2022, with more than 234,000 papers published, with the US second at 172,000, although US publications were cited more often in research papers.

From 2014 to 2023 China had six times as many generative AI patents as the US, although the US was stronger on patent quality, according to the study.

The ITIF recommends the US increase research and experimentation tax credits, establish industrial research institutes similar to Taiwan’s ITRI and carry out other measures to improve its competitiveness by adopting a “national power capitalism” model.