Angela Zhang, a professor at the University of Hong Kong, is a specialist in how China regulates and monitors its technology companies. China is always cited as the world’s second largest power: apps such as TikTok, Temu or Shein are of Chinese origin and are among the most used in the world. Its electric cars, batteries or phones are also leaders in many markets. But little is known about its domestic market and the reasons for its successes and failures. Zhang, 42 years old and born in Hong Kong, has just published a book entitled High Wire, on regulation and technology, currently only in English. A few days ago she was in Madrid invited by the Aspen Institute to explain the changes in this country from within.
Zhang is in the awkward position of being pro-Chinese when speaking in the US, which is now very concerned about the rise of a new power, and too “outspoken” for the Chinese government itself: “Because I am so outspoken and critical of the Chinese government, they don’t welcome me there,” she says. The book has not yet been translated into Chinese: “I have travelled to nine countries to present it, but I have not been to mainland China,” she says. “If they translate it, it might be influential in China, and that influence will do me no good.”
Ask. Why are Chinese apps so competitive abroad?
Answer. Because they’re really good. The barrier to entry in consumer technology is relatively low, unlike semiconductors or other hardware. And China is a huge market, a big testing ground where companies can experiment. It’s a fiercely competitive market, and that’s partly why China has been able to foster such successful consumer technology. China is also home to a lot of good computer engineers. They also impose an incredibly tough work ethic on their employees. They have a 9-96 schedule. They make them work really hard. They’re also really good at user experience: they use psychology to analyze products and get users addicted.
P. It sounds almost subliminal.
R. Now everyone is more or less copying the Chinese to do something like this. They have reached another level in the design of their consumer apps.
P. She looks worried.
R. What worries me the most is the addictiveness of their apps because they have brought them to perfection, like TikTok, Temu or Shein. Within a company, especially in the management style, it is a very competitive business environment even internally: they divide their workforce into several teams to create the same app. That kind of internal competition really brings the product to perfection. It is a very tough way of management because if you are not good, you are out of the game. It is like a few The Hunger GamesThey make a lot of money, but Chinese companies really exploit their employees.
P. ChatGPT cannot be used in China.
R. No, they don’t want to come.
P. Because?
R. They don’t want to be subject to Chinese regulation. China introduced measures to regulate artificial intelligence in 2023. This forced companies to comply with many transparency requirements. I don’t think OpenAI or Microsoft would want to disclose that kind of information to Chinese regulators.
P. But is this transparency related to safeguarding socialist values?
R. Yes, that too. I think none of these companies will be interested in offering this kind of public service because they would have to meet this requirement: you need to be politically aligned with socialist values. It’s the same story as why Google left China. No major US networking company offers services in China because of information censorship requirements.
P. How do Chinese companies avoid hallucinations about socialist values?
R. When the first draft of the law came out in April last year, it included an impossible requirement: your AI had to be accurate and true, which is impossible because of those hallucinations. But they softened it and now they just need to make every effort to ensure that it is accurate and true. In practice, from the company’s point of view, they are very cautious. Often, for many questions you don’t get an answer.
P. Isn’t it a problem to limit the models so much?
R. To get a license from the Chinese Internet regulator, they need to take a test with a thousand questions. And then they have to make sure that the accuracy rate is over 90% or something like that.
P. There are rankings of major Chinese language models. There is a significant gap between GPT-4 and Chinese models.
R. Some say that the capabilities of their language models have reached 3.5 or almost 4. But if you ask ordinary users how they feel, the user experience is definitely not as good as using ChatGPT because very often you don’t get any answers. It’s not just because the way they write can sound like a computer or a robot, and not like a human. The quality of the answers is not that good. In some ways, this hinders the development of consumer-oriented GPT in China. That said, many of GPT’s services are geared towards business use and that is not subject to regulation because what Chinese regulators are concerned about are public services that can mobilize public opinion. So, as long as you only offer services to Huawei, Xiaomi, or for autonomous driving, there is no problem.
P. China has also been known for its regulation of teenagers.
R. Yes. They condemned Tencent’s video games as spiritual opium. And they tried to restrict teenagers’ access to a portion of their time spent playing video games.
P. Are these measures being applied?
R. Yes. It actually affected a small percentage of the business. Most video games are played by adults. Still, this kind of propaganda wins popular support for the government from many parents who are concerned about the abuse of these games. That is the goal of the offensive. The government intervenes to give power to the defenseless users of platforms, like those parents, teenagers, or the delivery people, the drivers.
P. There is a similar problem in the West.
R. Companies have become so influential and powerful that, in some ways, one thinks the Chinese government is doing the right thing.
P. But if a 12-year-old Chinese boy wants to create an account on Douyin, the Chinese TikTok, is it possible?
R. There are many ways in which they need your parents’ consent to open appropriate social media accounts or to access games. There are different levels of limits depending on the age. But I don’t think any of these platforms impose this limit seriously, because there are a million ways in which children can get around this restriction.
P. That’s what we believe here. But then you think that maybe the Chinese government has achieved this with its heavy hand.
R. No. People think that Chinese TikTok is cleaner and purer than outside TikTok because the Chinese government imposes strict control over content. But it is not true. Because that is how the platform makes money. They often get attention with all these viral videos that are bad for teenagers. Essentially, the government imposes very strict content moderation requirements on the platform, but with a clear emphasis on politics. What they really care about is political misalignments. Pornography or other harmful content is secondary. Every platform knows that this is the way to make money and those are the viral contents that can generate profits. Even if the government is very powerful and monitors, it cannot capture everything that happens. Its priority is politics, ensuring political alignment with socialist values.
P. But pornography still goes against socialist values.
R. They care more about independence.
P. From Taiwan?
R. Yes. The company has to deal with enough. They have to constantly adapt and change because of government requirements. They know that this is essential. They do it very carefully. Or for example, if there is a viral video that causes suicides among teenagers, they will start to worry. Because that affects social stability. After all, they care about everything that can mobilize public opinion. If it doesn’t reach that level of mobilization, they don’t care much.
P. The deepfakes yes they do care.
R. Yes, politicians are very concerned about the deepfakes. That’s why China is the first country to introduce rules to regulate it, so they already introduced a law and it came into effect in 2023. China is a huge country and home to a very large shadow economy that specialized in producing fraud: counterfeit products, fake reviews, and now deepfakes. We already have many financial scandals using technology deepfake to defraud people into not sending money, and much of this is already happening in China.
P. Will China soon have a new AI law?
R. They have started the legislative process for a national AI law. My prediction is that it will take at least two years.
P. Why would China make this law?
R. There are several reasons. First, Europe is very close to finalizing one. And that, in a way, puts pressure on other big jurisdictions. It doesn’t look good that you don’t have one. It shows that your government is not doing enough to regulate this technology. So it’s good to have it on the to-do list. Second, China is a very big country. Like the EU, it shares this concern of having a single entity. We want all the provincial governments to work together. So having a national law guides local governments on how to act, how to regulate AI, because local governments also have some regulatory functions.
P. But China, like the US, also has reasons to hope.
R. Yes. China may take a wait-and-see approach. Starting the process doesn’t mean they do it tomorrow – although if they wanted to, they could do it tomorrow. First, they can wait and see what happens and second, they may want to give the market and investors enough time to understand what the government intends. They don’t want the government to be seen as imposing regulations that could discourage investment. This is the last thing they want and especially what I talk about in my book: China went through an unprecedented crackdown between 2020 and 2022 and one of the serious consequences was that international investors fled the Chinese tech sector. There is a crisis of confidence not only in technology but in the economy in general. The big issue now is how do we revive the economy? How do we stimulate the market? How do we regain investor confidence? So they don’t want to impose another strict regulation that could sabotage all this confidence that they are trying to build. They will definitely take a wait-and-see approach and even if they have a law, it could be very different from the one the EU has. Even having it doesn’t mean they’re going to enforce it.
You can follow THE COUNTRY Technology in Facebook and X or sign up here to receive our weekly newsletter.
Subscribe to continue reading
Read without limits
_
