With abundant funding flowing into startups, talents, and infrastructure, China has become fertile ground for AI development. The country is aiming to build the world’s top hub for AI innovations and talents, and yesterday, prestigious Tsinghua University issued a progress report. The 2018 China Artificial Intelligence Development Report provides an insightful, data-intensive overview of the current status of AI in China.

The report estimates that investment and financing in Chinese AI companies over the last five years accounted for 60 percent of the global total. In June 2018 China had more than 1,100 AI companies, about half the US number.

China is home to 18,232 AI talents, accounting for 8.9 percent of the global total and trailing only the US (13.2 percent). The report notes however that fewer than 1,000 of China’s talents can be categorized high on the H-index — a scientific research impact rating based on a scientist’s papers and citations.

China’s global share of AI research papers meanwhile has grown from 4.26 percent in 1997 to a world-leading 27.68 percent. The country also holds the most AI patents, slightly ahead of the US and Japan.

The fields of computer vision, voice technology, and natural language processing accounted for 34.9 percent, 24.8 percent, and 21.9 percent respectively of China’s 2017 AI market value of CN¥23.7 billion (US$3.54 billion). The report projects a 2018 market growth rate of 75 percent.

China’s AI policy focuses on six aspects: Manufacturing in China, Innovation, the Internet of Things, Internet+, Big Data, and R&D. The country’s AI companies are largely clustered in Beijing, Shanghai, and Guangdong. Local city and provincial policies vary, for example Jiangsu Province pivots on infrastructure, the Internet of Things and cloud computing; Guangdong Province is a hub for manufacturing and robotics applications; and Fujian Province is largely dedicated to the Internet of Things, Big Data, innovation platforms and IP.

The Chinese Ministry of Education has approved 79 AI-related undergraduate majors, and this spring issued its AI Innovation Action Plan for College and Universities whitepaper to foster the creation of more AI talents.

Although the report gives China an “A” in AI funding, technologies and commercial applications, it suggests there is room for improvement regarding research capabilities in hardware and fundamental machine learning algorithms.