In recent years, China has been developing a variety of applications in Big Data collection and analysis. The collection of Big Data includes personal biometric data such as facial recognition, fingerprint, iris and DNA data and behavioral data on the public’s utilization of smartphones, posts on social media, and e-payment transactions for the purpose of behavior modeling.
Take Alibaba’s Sesame Credit services’ use of Big Data and Cloud Computing as an example. An individual’s credit score is analysed based on five inputs: credit history, behavioral preferences, contract fulfilment capabilities, identity and personal traits, and contact networks. Meanwhile, China completed the implementation of its Social Credit System across the country in 2020. There are now 626 million CCTV cameras within its borders. These cameras are equipped with a facial recognition system and are installed at every street corner to scan and identify any face in real time. However, the Chinese government and enterprises involved in the collection of data are unable to clearly explain the associated risks and protections offered.
Analytics entails the application of machine learning to process Big Data. This can be calibrated accurately by machines and labeled precisely by humans. It is the best usage case of artificial intelligence (AI) evolved from human intelligence.
The City Brain, a joint effort between Alibaba and the Hangzhou City government, is one of the largest AI public infrastructure systems in China. It encompasses traffic, security, medicare, tourism, city development, urban planning, industrial, environmental and government administration. The analytics provides insights for decision-making by urban planners in traffic management, fire prevention, smart inspection and disaster response. This system developed in Hangzhou has been rolled out in over ten cities including Suzhou, Guangzhou, Xian and Chongqing.
Another example is public health management. At the outbreak of COVID-19 in early 2020, SlimHz Lab used AI to predict the pandemic risk factors in major cities. Feedback from experts and scholars was gathered and entered into their knowledge bank to facilitate an epidemiological analysis. The information was sourced from nearly 300 cities in China and included COVID-19 diagnostics, medical resources, epidemiological history, the number and direction of migrants, traffic data (e.g., underground maps and passenger estimates), intensity of passenger flows in different regions, and the control status in each city. Additionally, the China Electronics Technology Group Corporation worked with the National Health Commission to design a platform to monitor and measure those in close contact. Every citizen’s movements on the public transportation system are recorded in the system. Any user can know whether they are at risk of catching COVID-19 by entering their personal data in the system.
Visual recognition algorithms keep an eye on everybody’s identity and behavioral patterns as captured by the cameras. The real-name system seamlessly connects individual’s online and offline identities. This, however, has raised questions from the U.S. and European countries. As of now, the U.S. has listed over 300 Chinese companies on the “entity list” of companies that are involved in AI, facial recognition, networking & communication, genetic engineering and video surveillance. The list includes SenseTime, Megvii, CloudWalk, and Yitu Technology. This is likely to affect the development of the AI industry in China.
Given the continued acceleration of trade conflicts between China and the U.S., foreign companies are more likely to invest in regions where their data is protected and information is secure by scaling back operations in China and diversifying their production bases.
For Taiwanese companies, information security is a key concern for the global market. It is advised that companies should review their enterprise risk management by strengthening firewalls and information security systems to ensure that the information relating to customers’ products is protected to the highest specifications. This will be the catalyst for winning export orders going forward. China remains an important market and a production base. It is suggested that Taiwanese companies should review the amount of U.S. technologies and key components for products that are being sold to Chinese customers in order to mitigate the risk of violating the Export Administration Regulations (EAR) set forth by the U.S. government.
In sum, Taiwanese companies should deliberate on how to effectively diversify risks in a business environment of extremely uncertain geopolitics. It is necessary to reexamine the supply chain arrangements and adjust corporate development directions and strategies on a timely basis. By strengthening connections with local innovative resources or supply chains, enterprises will be able to respond quickly to external changes and seize opportunities.