Eleven trillion renminbi: it's a number that's hard to comprehend.

Key points: China wants to be world leader in AI by 2030

China wants to be world leader in AI by 2030 It's a key part of Beijing's plan to refashion its image as a cheap goods manufacturer

It's a key part of Beijing's plan to refashion its image as a cheap goods manufacturer Experts warn against deploying AI in warfare too quickly

In Australian dollars that's about $2.41 trillion — far bigger than Australia's entire economy — and it's the target China has set for the value of its artificial intelligence and AI-related industries by 2030.

China is said to have accounted for more than half of all global AI investment over the last five years and in just the next three years alone Beijing expects a tenfold increase in the size of the industry.

And if you're still not convinced China is serious about artificial intelligence, remember Xi Jinping made mention of AI in his opening address to the Communist Party Congress last year.

"The hype around China's investment in AI is definitely the highest in the world," the University of Oxford's Jeffrey Ding says.

The huge AI investment is all part of what Beijing calls "Made in China 2025" — a master plan to reposition China as an industrial superpower of the future.

The tag "Made in China" usually conjures up thoughts of cheap goods and poor quality electronics, but the Asian power is on a mission to change that by turning from a mass producer of low-end products to a world leader in cutting-edge technology.

Made in China 2025 highlights 10 key industries — from robotics and IT to green cars and aerospace equipment — and underpinning so many of its goals is AI.

"China's pursuit of AI has, arguably, been 'the story' of the past year," Mr Ding says in a report titled Deciphering China's AI Dream.

Artificial intelligence is a term that has grown in prominence in recent years and refers to the development of computer systems that can perform tasks normally requiring human intelligence.

Dive a bit deeper and you'll come across words like "machine learning", which basically refers to the ability of computer systems to use data to teach themselves.

AlphaGo also beat world number one Go player Ke Jie last year. ( Reuters )

It might sound all a bit far-fetched, but AI is already all around you — it's on your smartphone, in your social media feeds, and making decisions for you on your streaming services.

And it's already starting to seriously amaze people; remember when Google DeepMind's AlphaGo beat 18-time world champion Lee Sedol at Go, the ancient Chinese game thought to be the most complex ever developed by humans?

Go has more possible move configurations than there are atoms in the universe and with its mix of strategy, intuition, and mind-boggling complexity had long been considered the exclusive domain of humans — until that famous win.

That moment is said to have shocked some of China's top techies and academics into drastically ramping up their AI game.

China aims for AI world dominance by 2030

Chinese Vice-Premier Liu He speaks at the World Artificial Intelligence Conference in Shanghai. ( Reuters: Aly Song )

The potential of AI is almost unimaginable; Vladimir Putin recently said whoever leads in AI would "rule the world", while Google's former China head, Lee Kai-fu, warns: "AI is going to change everything. To not understand the coming AI revolution is to risk getting left behind."

And Xi Jinping's Government knows this. It sees AI as an economic game-changer, something that will "profoundly change human social life and the world".

"By 2030, we shall make artificial intelligence theory, technology, and application at the world's leading level," the Chinese Government said in its top-level AI plan.

"[China will] be the major artificial intelligence innovation centre of the world."

AI in real life: Social media feeds

Social media feeds Smart phones

Smart phones Voice recognition

Voice recognition Language translation

Language translation Facial recognition

Facial recognition Email filters

Email filters Defence systems like drones

Defence systems like drones Medical diagnoses

Medical diagnoses Fraud prevention in banking

Fraud prevention in banking Internet browsing recommendations

It's an ambitious goal, but not one to be dismissed.

Beijing's Tsinghua University, often referred to as "China's MIT", says China's AI industry attracted 60 per cent of the world's funding for AI between 2013 and 2018 and ranked first in the quantity and citation of research papers.

"China's AI industry has significantly increased in both absolute and relative terms in the past few years," Mr Ding's report said.

Mr Ding has developed his own method of measuring a country's "AI power" and says China has a clear lead over the world's AI powerhouse, the US, in one of four key factors — data.

AI is hungry for data — the more it gets, the smarter it makes itself — and with 1.4 billion mobile phone users compared the US' 427 million, Beijing has a big advantage.

"Everything is big, so even if they only collect the data from one city, that might already be 7 million people," University of Melbourne AI expert Professor Uwe Aickelin said.

The trade war between Donald Trump's America and Xi Jinping's China is intensifying. ( Reuters: Jonathan Ernst )

In the battle for supremacy between the US and China, the Americans are under no illusions as to the progress being made by their Asian counterparts.

US President Donald Trump earlier this year gathered some of the country's top business people to discuss the state of AI.

And it's no secret the Made in China 2025 blueprint has been a key factor in the trade war between the US and China.

There are concerns the policy will break trade rules and that China has an unfair advantage because of the Government's influence over big business.

But when it comes to the overall state of AI development, China has a lot of work to do to catch up to the US.

China trails US in overall 'AI power'

Using his model, Mr Ding found China lagging way behind in the other three key drivers of "AI power": hardware, like computer chips, research, and the commercial sector.

America was given a score of 33 out of 100, representing its share of the world's total AI capabilities, compared to just 17 for China.

A University of Oxford report found the US clearly leading China in overall AI capabilities. ( Supplied: DeepMind )

And the US has big advantages with its superior technology and the access it has to the industry's smartest people.

"The US currently benefits from attracting the best and brightest from around the world into its innovation pipeline; China is hoping to do the same," Mr Ding said.

But Professor Aickelin warns change is afoot in China.

"You've got to remember Chinese students and Chinese talent has been going abroad for 10-20 years now, doing their PhDs in America, doing their PhDs in the UK, and many of those have now returned," he said.

"A lot of this brain power has come back."

And although the US and Europe are making it harder for Chinese companies to get a foothold in their tech firms, there are other ways to accumulate knowledge.

"Industrial espionage and state-directed IP theft are definitely major issues," Mr Ding said.

How China is advancing 'swarm intelligence'

Drone technology is one of the main examples of AI at work in defence forces. ( US Air Force: Tech Sgt. Effrain Lopez )

While there is plenty of talk about investment in AI and the progress being made, perhaps less understood is exactly where this AI is being deployed.

The ABC's China correspondent Matthew Carney recently detailed how China planned to implement a "social credit" system for its citizens, drawing on AI technology such as facial recognition.

Another key area is defence.

The Centre for a New American Security's Elsa Kania is one of the world's foremost experts on China's use of AI in defence and warfare.

"[The People's Liberation Army] is exploring the use of AI to enhance command decision-making capabilities, seeking to achieve decision superiority on the future battlefield," Ms Kania said.

She said there was a range of ways China was deploying AI in defence, including unmanned vehicles, simulation and war-gaming, and information processing.

But one of the most prominent potential uses is "swarm intelligence", such as the use of dozens or more drones to overwhelm enemy targets.

Elsa Kania says China is developing technology that could enable "swarms" to target aircraft carriers. ( Reuters/US Navy )

"The PLA may seek to use swarms to target and saturate the defences of US aircraft carriers," Ms Kania cites as an example.

"The Chinese defence industry has achieved significant advances in swarm intelligence and appears likely to continue to progress in this technique."

The world was witness to China's potential for swarming when a Chinese drone manufacturer claimed to have broken the world record for the most unmanned aerial vehicles (UAVs) simultaneously airborne during a display in the city of Xi'an earlier this year.

It followed other similar displays in previous years.

Sorry, this video has expired China puts on what it says is a world record-breaking drone light show.

But as the "AI arms race" heats up, Ms Kania says there is reason for concern.

"The intensification of military competition could result in too rapid deployment of technologies that remain quite untested and uncertain, resulting in new, perhaps unanticipated, risks," she said.

Regardless, the US is being warned against complacency.