AndrewWong

In recent speeches, Donald Trump reiterated his intention to halt trade ties with China. The former president's emphatically harsh rhetoric is prompting the White House to demonstrate its willingness to strengthen anti-China measures. As usual, the Chinese remain silent and pretend that nothing is happening.

During his election campaign, the Republican leader assured that he would impose customs duties of 60% on Chinese goods if elected president. According to Trump, the purpose of these measures is to "bring companies back to the United States". In addition, the ex-president hinted at the need for greater control over investment flows between the two countries.

Many experts believe that such steps will actually mean the severance of economic relations with the People's Republic of China, though with certain reservations. Already, a significant part of Chinese products enters the USA through third countries. They come mainly from Southeast Asia and Mexico, with the latter displacing the PRC as the leading importer of goods to the United States in 2023. A multiple increase in tariffs will lead to a complete overhaul of supply chains between the two largest economies. The additional costs, analysts warn, will be borne by American consumers.

Against this background, the local media began publishing about the administration's plans to announce measures to limit financial transactions with Beijing in the near future. The reason cited is the supposedly increased risks of "sensitive" personal data falling into the hands of the Communist Party of China. It should be noted that restrictions against Chinese electric cars are being worked out under the same pretext.

As expected, the presidential election campaign is becoming a key factor influencing the development of US-China ties. In this context, the Democrats are facing a challenging task. On the one hand, the White House is interested in maintaining the current dynamics of US-China contacts. Among other things, this is due to the need to demonstrate the effectiveness of the "responsible competition" with Beijing. On the other hand, Donald Trump's scathing statements are resonating with voters, pushing the administration to take stronger measures against the Public Republic of China, primarily protectionist ones.

Of course, the Chinese are closely monitoring the US election campaign and are trying not to comment on Trump's attacks against them.

The Chinese expert community is focused on competition between China and the USA for AI domination. China's local AI companies in contrast to country's authorities are skeptical towards achieving global AI leadership by 2030 amid the American sanctions, lack of state support, variety of technologies and lack of staff. Many of the Western countries acknowledged China's lagging from the developed world.

The recent article of China's minister of science and technology Yin Hejun rates highly the AI achievements of China. It mentioned the volume of local AI market in 2023 was 500 billion yuan, the number of AI companies is above 4400, among these companies 108 with capitalization over 1 billion US dollars. About 500 institutes of high education introduced programs to study AI.

The article highlights the 2017 plan to develop the next generation AI to make China the global AI leader by 2030.

But according to the unanimous opinion of local experts, China is still behind the US. Americans are almost monopolized the global AI market by bringing Open AI's advanced ChatGpt to the masses. Fast development of this tool became possible due to the feedback from users, including China where this service is officially banned, and this made the gap between America and China even bigger.

China's local companies responded with creation of series of competitive LLM products that are the basis for generative instruments which are used at least for now only on China's local market. At the moment the technological giants (Baidu, Alibaba, Iflytek) achieved only the level of ChatGpt 3.5 and plan within the year to surpass the actual ChatGpt 4.

However, the Americans also keep pushing and taking leadership on the market of generative AI. OpenAI's text to video Sora was presented in February and has no Chinese analogs and repeats the ChatGpt history.

According to the representatives of IT companies, the pace of AI development in China is on hold by a number of factors. In March the head of Iflytek Liu Qingfeng pointed that technological gap between China and America is not decreasing because of the US sanctions that limited access to the global LLM achievements. He believes the solution is promoting the AI by relying on local projects. As example he mentioned the LLM model of his company Spark that got a push to development after the Western sanctions and by making a contract with another sanctioned Chinese company Huawei.

The head of China Electronic Corporation Zeng Yi also said that the lack of state support of local developers, start-ups and IT companies in the AI race makes the gap between China and the West even bigger. The businessman asks the developers to cooperate with the local producers since the Western technologies may at any moment lose functionality and support.

The representatives of the local IT business believe the uncontrolled development of national hardware base requires too much resources and hinders the pace of AI development. The chairman of JD.com's Technology Committee Peng Cao notes that scattered technical chip solutions make it hard to develop software. This way local companies should consolidate their efforts to create AI platforms and lower their amounts.

At the same time, China's developers are still highly dependent on Western software solutions. This March the analysts of Beijing Academy of Artificial Intelligence marked in their report to China's State Council Li Qiang the problem of high popularity of Western tools with free access. According to their data the biggest part of local AI developers uses 2023 LLAMA model of American company META, which owns Facebook and Instagram and is among global AI leaders, for their own LLMs.

According to Xiaomi founder Lei Jun the key flaws of Chinese AI ecosystems are lack and turnover of staff. Only 40% represent the qualified personnel while the graduates prefer West to build careers. For instance, in Sora two of thirteen employees are from China. Xiaomi believes the only way to achieve the ambitious aim of overtaking the US and becoming the global AI leader is tight cooperation of state and business to bring back the best and young professionals to work on the breakthrough projects.