China’s political economy has enabled the rapid development of workplace AI tools. This chapter explores the particular factors that have allowed this accelerated progress.
China offers a useful window into the latest applications of AI in the workplace. While trailing behind the US in core advances in AI research, China’s strength lies in its ability to turn emerging technologies into practical applications quickly and cost-effectively to advance real-world progress for businesses. The country is home to over 4,300 AI firms, second only to the US, with the majority focusing on commercial applications.
Workplace AI is rapidly expanding, with a surge of new products and services launching in the Chinese market due to the reduced costs of developing and deploying AI systems in recent years. The workplace AI landscape in China is fiercely competitive, featuring a blend of offerings from both established domestic tech giants and burgeoning AI startups. The major players in this arena are largely the dominant domestic frontrunners of the early internet era, including e-commerce platform Alibaba, search engine Baidu, gaming company Tencent, and TikTok’s parent company ByteDance. They are also developers of the most widely used collaborative AI work platforms in China including DingTalk, Feishu and WeCom. Their dominance is largely due to their extensive resources and capabilities, which allow these companies to develop sophisticated AI models – a process that demands considerable capital and expertise. Key technologies that feature in their products include natural language processing (NLP), robotic process automation (RPA), speech recognition, computer vision (enabling programmes to derive information from image and videos), recommendation systems and predictive analytics. Nevertheless, there is a growing presence of smaller firms in the market. These typically utilize less complex, open-source AI models to offer basic and straightforward functionalities at lower costs, which often leads to some of the most visible exploitation of workers.
The latest progress in large AI models, underscored by ChatGPT’s success, is driving a significant rise of investment in AI solutions for work in China.
The latest progress in large AI models, underscored by ChatGPT’s success, is driving a significant rise of investment in AI solutions for work in China. While the OpenAI service is not available in China, in August 2023, Beijing approved its first batch of home-grown generative AI services for public use, including ChatGPT-like chatbots launched by tech firms Baidu and SenseTime.
China’s rapid adoption of AI for commercial applications in workplaces is underpinned by its political economy, placing the country in a notably advantageous position compared to the rest of the world – with limited regulation and privacy laws, high levels of competition and state support.
Data abundance and lax laws
China boasts a wealth of varied personal data, which firms can access and utilize for AI development. The quality and size of datasets are crucial to the training of AI algorithms and the accuracy of the predictions that the systems make. China’s workforce, consisting of a staggering 782 million people, offers a vast reservoir of data. With 540 million employees conducting all or portions of their work through online platforms, a significant amount of this data is already in digital formats. The widespread use of smartphones, wearable technology and other monitoring devices, further facilitates the extensive data collection from workers’ day-to-day activities – beyond the traditional workplaces.
Compared to strict regulations in the West, China’s legal protections on privacy remain relatively lax, despite recent updates to strengthen data protection rules. As a result, Chinese workers may be less likely to take legal action against extensive personal data collection practices at workplaces, especially as many perceive that their data are already being collected and analysed by the state and corporations for commercial and public service purposes. Compared to citizens of other Asia Pacific nations, Chinese workers are among the most willing to trade privacy for safety and convenience. This mix of lenient regulations and greater public tolerance allows Chinese firms to collect and utilize user data whenever possible and for whatever purpose they see fit.
Market competition
AI solutions are viewed as an effective tool for businesses to outperform rivals in China’s fiercely competitive commercial environment. Firms operate on thin margins and their survival is dependent on careful allocation of limited resources. The perception of AI as a shortcut to business success is alluring. Indeed, the rise of gig economy platforms – core to China’s booming digital economy – demonstrates the power of AI in managing a large and geographically dispersed workforce. From hiring to firing, AI promises greater cost-efficiency at every stage of employment. These are critical considerations for Chinese companies looking to scale rapidly without a proportionate increase in human resource costs.
State support
China has a highly centralized economic planning system that can quickly shift resources to strategic areas to support the political agenda of the country’s leadership. Currently, China has high hopes that AI will bolster its slowing economy and increase its international influence, therefore it has created an AI-friendly policy environment for firms to explore ways to implement the technology. Furthermore, China is experiencing a demographic shift, with fears that it could soon face a labour shortage as its population ages. The ambition is that AI will help China escape the middle-income trap and continue to prosper beyond its ‘world factory’ era, which was largely powered by the abundance of cheap labour.
Much like the relaxed regulatory environment in place during the initial expansion of internet giants like Alibaba and Tencent, firms developing and utilizing AI have been given substantial leeway to explore how to harness new technologies for improved productivity without having to worry too much about legal repercussions. Yet, Beijing has recently intensified its regulatory measures on the implementation of high-stake generative AI models, such as those that power ChatGPT, recognizing that such services could pose risks to the government’s political control. Further research is needed to discern how and where Beijing chooses to draw the line between political risks and economic growth regarding AI development.
The speed at which a new AI product can be launched to market is much faster due to competitive pressure and the lack of rigid regulatory oversight.
Due to China’s political economy, the adoption of AI solutions in the country’s workplaces significantly differs from the West. The speed at which a new AI product can be launched to market is much faster due to competitive pressure and the lack of rigid regulatory oversight. Personal data collection and the profiling of workers can be more aggressive due to the absence of independent worker unions and loose labour laws. While China has been keen to develop new laws to govern AI and its algorithms, the focus of recent regulations has been on information control, consumer rights and the anti-competitive practices of big tech companies. Therefore, the power imbalance between workers and employers remains embedded in China.
However, public concerns have been escalating over AI’s role in fostering exploitative conditions for gig economy workers in China. For example, the efforts of academics and journalists to expose the challenging conditions faced by delivery drivers under algorithmic management sparked widespread public outrage, leading to the incorporation of protections for workers in the algorithmic recommendation regulations enacted in 2022.
Chinese workers are experiencing rapid changes during their day-to-day work as AI becomes more prominent in the workplace. While many enjoy the benefit of AI taking on some of the tedious and repetitive tasks, they also find themselves having to quickly adapt to new ways of working, where AI is a competitor, an assistant and, increasingly, a boss. Workers are not only concerned about AI potentially taking over their jobs, they are also concerned that one day they will be fired by AI based on its assessment of their productivity and value to the firm.
Worldwide phenomenon
Such experiences are not exclusive to Chinese workers as AI tools are sweeping into workplaces worldwide. AI is now woven deeply into the fabric of our daily lives and work routines. This technology contributes to the exponential growth of the gig economy and flexible working – a trend well underway even before the COVID-19 pandemic. From ride-hailing to cleaning, food delivery and home-sharing, AI powers digital platforms that link hundreds of millions of freelancers with customers for short-term jobs and contractual work. In the UK, three out of every 20 adults secured work via AI-powered platforms at least once a week in 2021, compared to one in 20 in 2016. A growing body of work from Western scholars and the media has started to examine the algorithmic management and surveillance experienced by workers on big tech platforms such as Amazon and Uber.
While previous progress on automation and robotics predominantly affected workers in low-skilled roles, those in high-skilled professions and the creative sectors are now increasingly feeling AI’s presence. Leveraging AI’s ability to analyse and predict outcomes from vast datasets, well beyond human capabilities, businesses are utilizing AI to accelerate decision-making, optimize resources, engage customers and identify new opportunities, although the effectiveness of its functionality is sometimes debated. Workers are also using AI solutions to facilitate work. ChatGPT, a chatbot developed by Microsoft’s OpenAI, accumulated 100 million users globally within mere months of its launch. A 2023 survey shows that 10.8 per cent of employees of worldwide companies surveyed have tried using ChatGPT in the workplace at least once as of June 2023, up from 5.5 per cent in February of the same year. The huge potential of large AI models to enhance productivity has already prompted executives to re-evaluate their investment strategies and recruitment plans.
The rapid progress of AI technology and its implementation in workplaces presents new challenges for workers in China and around the world. The following chapter explores these challenges through real-world examples of AI adoption in workplaces and the experiences of workers involved.
