After the US brought us the third industrial revolution—termed ‘The Digital Revolution’—GlobalData notes that China is now looking to lead the fourth—’The Cyber-Physical, AI-Powered Internet of Everything (AIoT) Revolution’. For want of a better name, this movement will not only see a blur of boundaries between the physical and digital worlds, but also a fragmentation of ‘personal internets’ whereby different nation states create their own, secured and monitored, version of the internet.

Michael Orme, Consultant at GlobalData, comments: “China has been mobilizing since 2016 to dominate the ‘Cyber-Physical AIoT Revolution’, which will come into being by 2030, seeing a multi-polar world of ‘splinternets’ form. In the midst will be a powerful self-sufficient ‘China zone’, using Chinese technology (developed and performing under Chinese technology standards and protocols).

“Neither the US, nor anybody else, can or will match the enormous investment China is putting into creating the world’s most advanced and ubiquitous AIoT-enabling digital infrastructure: $1.3 trillion between 2019-2024 alone. This has yielded some notable successes. For example, China leads the US and Europe by several years in the development and deployment of high-speed wireless communications and has achieved parity with the US in some key areas of AI.”

According to GlobalData’s latest report, ‘China Tech – Thematic Research’, China regards data as the fourth factor of production. It highlights that AI algorithms, which will be embedded everywhere, will need constant live feeds of increasingly rich data from all quarters.

Orme adds: “China will have much more machine-readable data, as well as greater data diversity and depth than anyone else.”

However, China does have some challenges ahead.

Daniel Clarke, Analyst on the Thematic Research Team at GlobalData, comments: “The Chinese century has long been discussed as inevitable, however, the reality is much more complicated. Standing in China’s way are a set of macroeconomic challenges.

“Perhaps most overlooked is the country’s birth rate, which is quite likely worse than officially reported. The Chinese Communist Party must walk the tightrope of dealing with COVID-19 while ensuring they do not tank the economy and keep capital flight at a minimum.”

GlobalData states that China also faces the challenge of recalibrating the economy away from being investment and export driven, toward a consumption-driven economy.

Clarke continues: “A move towards a consumption-driven economy involves rebalancing the property sector, ensuring it works for the Chinese people, akin to President Xi’s common prosperity agenda. Turning the macroeconomic tides in favor of the Chinese public is key to quelling growing social discontent as we have seen with the tan ping – lie flat movement.”