AI Ethics and Governance Researcher Fabrizio Degni: “China Is a Dominant Force in E-Commerce, AI and Digital Transactions.”

To evaluate China’s emerging digital technologies and artificial intelligence, The Ankara Center for Crisis and Political Studies (ANKASAM) presents below the interview with Fabrizio Degni, AI Ethics and Governance Researcher. 

1. What are the factors (dynamics) behind China’s rapid rise in technology?

In my opinion China’s comprehensive approach to technological development, combining government direction, massive investment, talent cultivation, and market scale advantages, has established it as a leader in several digital domains while rapidly advancing in others. Its strategic focus on artificial intelligence reflects recognition of AI’s critical importance for future economic and technological leadership.

Several factors have contributed to these developments:

As first the Chinese government has integrated technology into national security objectives and outlined long-term goals through successive five-year plans: targeted initiatives such as “Made in China 2025,” “Internet Plus,” “Dual Circulation,” and “Document 79” provide specific roadmaps for technological advancement. Additionally, a policy reset indicated by Xi Jinping’s February 2025 meeting with tech entrepreneurs signaled a shift from regulatory crackdowns to active innovation support: there has been a significant financial commitment to research and development, with expenditure that reached 3.6130 trillion yuan ($496.32 billion) in 2024, an 8.3% increase from 2023 according to the information I have found. The growing R&D intensity reached 2.68% of GDP in 2024, surpassing the EU average of 2.11% and approaching the OECD average of 2.73%. Moreover, there is an increasing focus on basic research, which saw 249.7 billion yuan invested in 2024, a 10.5% increase from 2023. Comprehensive nationwide coverage has been achieved through significant investments in both urban and rural areas. China is taking a leading role in 5G deployment, aiming to install 5 million 5G towers countrywide. In addition of what so far reported, the development of a national-level integrated big data center system has been prioritized. STEM education is dominant, with 3.57-5 million STEM graduates annually, accounting for over 40% of all university degrees. World-class universities such as Tsinghua and Peking consistently rank among the top global institutions.

I believe another important fact should be pointed out: China surpassed the US in STEM doctoral degrees awarded in 2019 (I am aware we should here go in depth about quality and typology of the domain).

Policies like the “Dual Circulation” strategy and initiatives such as “Made in China 2025” aim to promote a resilient domestic economy while embracing international trade. MIC 2025 outlines a ten-year plan for upgrading manufacturing and achieving technological self-sufficiency. Document 79 targets self-reliance in core ICT technologies by 2027, highlighting the Chinese government’s commitment to reducing foreign dependency in strategic sectors. These policies reflect the government’s active role in accelerating technological development and that approach is cross-domain, as pointed out above. This state-directed approach, while driving rapid advancement, creates tensions between centralized planning and market-driven innovation. The government’s heavy involvement in selecting strategic industries has demonstrated both successes and limitations. Critics note that while this model has accelerated infrastructure development, it sometimes creates inefficiencies in resource allocation and may inadvertently discourage disruptive innovation that doesn’t align with official priorities.

2. What can you say about China’s leadership in the field of digital technology in the world? Can you explain the point reached by the world countries and China in this regard comparatively?

In my opinion, the acceleration of China’s technology is the result of an unusual blend of state control and direction, entrepreneurial spirit, and large-scale consumer adoption. While the result remains powerful, complex, and ever-changing, it is clear that China is a dominant force in e-commerce and digital transactions. China is responsible for nearly half of global e-commerce activity, which in 2023, is recorded at $3.02 trillion and is expected to grow further to $3.45 trillion by 2025. Additionally, online shopping constitutes 47% of total retail sales, and 64% of those transactions are via mobile, epitomizing the emerging first mobile consumer nation China. 

I am of the view that this ecosystem did not spontaneously originate from the marketplace, but rather from deliberate government policies, infrastructural spending, and the early emergence of platform behemoths. Likewise, in mobile payments and fintech, the global leader is China. Alipay and WeChat Pay command supremacy, controlling over fifty percent of the world’s digital payments. Usage rates surged to 87% among active users in 2019. In my perspective, what’s stunning is not just the figure but rather the extent to which these technologies have broadened financial services to previously marginalized populations. China’s progress in central bank digital currency, e-CNY, additionally demonstrates a bold state-centered strategy that might reshape societal money use. Despite these impressive achievements, China’s digital ecosystem development has raised concerns. The concentration of data in a few major platforms creates potential privacy vulnerabilities and market dominance issues. Additionally, the integration of government oversight into digital infrastructure, while enabling rapid coordination during crises, has prompted international debates about appropriate boundaries between state and commercial digital activities. 

In areas of growing strength, cloud computing is a sector to keep your eyes on. The pace of growth in this industry is astounding, with R&D investment likely surpassing that of U.S. companies. The creation of a single national data centre policy indicates some optimism. In my view, however, the real challenge lies in the balance of rigorous oversight and the openness and trust that cloud services demand. Yet, not everything is perfect. The digitization of industry processes continues to be a work in progress. While China reduced the gap with the U.S. in the Digital Economy Ranking from a 4.9x difference in 2013 to 3.7x in 2016, it still placed 50th on the Digital Adoption Index and 59th in the World Economic Forum’s digital readiness rankings. In my view, this lag is likely due not to a lack of drive, but rather from the systematic issues involved in aging industries and uneven capabilities across regions.

3. Can you talk about the importance China attaches to artificial intelligence? Also, why has artificial intelligence become so critical in the world? What is China’s share in this?

In my opinion, AI is one of the most innovative attempts by China to redefine its position in the world as a superpower, as it becomes a core part of their internal policies. AI has received extensive support via strategic multi-level administrative frameworks as critical for both economic leadership and national power. For example, the 2017 “New Generation AI Development Plan” clearly stated the goal of becoming the leader of AI innovation in the world by 2030. Now to achieve this goal, China is promoting the use of AI in all industries by the “AI Plus” initiative at the same time striving for its industrial transformation. Chinese scientists are quite versatile in their research, along with brain-inspired intelligence, they also deal with autonomous systems and high-level human-robot interaction. 

Moreover, I appreciate the focus on not only to promote the innovation but also social responsibility, which, in this case, means ethical implementation. The regulation tries to keep pace with the development, but there is an attempt to strike a balance between control and rapid advancement. Understanding the global significance of AI leaves no stone unturned. From how economies evolve to how people move in the world AI systems pervade almost every aspect of life in one way or the other. Institutions like Goldman Sachs believe that with the productivity gains AI is expected to deliver, global GDP will likewise experience massive growth. Its uses cut across industries: from enhancing sustainability in manufacturing to revolutionizing logistics and even medicine. 

It is not only economic competition countries are struggling over, but a competition for having a clear long-term strategic advantage. China is already considered as one of the dominant players in the global AI region. In 2021, over 25% of all documents presented in the major AI conferences were from Chinese institutions. The patent landscape tells a similar issue, China filed over 300,000 AI patents in 2024, substantially more than the U.S. whose filings during the same period were only 67,000. In the period of 2014 to 2023 China filed six times more patents in generative AI than the U.S. This boom is still quite fresh considering other companies such as Cambricon who’s valued at $34 billion in 2024 are showing promise in commercializing real-world AI breakthroughs.

When it comes to analyzing problems, I consider the imbalance between the state-controlled direction imposing boundless freedom and creativity in research work one of the most pressing. While vertical approaches can incentivize progress, innovation itself is usually achieved in a priceless environment which can irreversibly harm the originality crucial for breakthroughs. The development of human resources is also an important matter.

Looking ahead, I believe China’s AI ambitions will increasingly hinge on its ability to navigate these complex internal and external challenges. The momentum is there, but sustaining it will require adaptability, openness, and a deeper cultivation of homegrown innovation from the ground up. 

The technological rise of China has created complex dynamics in international relations, particularly with Western nations. This tension creates both challenges and opportunities: while it disrupts global supply chains and research collaboration, it may also accelerate domestic innovation in both regions as they seek technological self-sufficiency. 

I am wondering about the cost of this innovation for ethical and responsible evolution and adoption.

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