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Technological development and advancement in the Silicon Dragon – China

by: SPI


This document is targeted for the following audience: 

  • European SMEs and start-ups who provide innovative methods or ideas in specific sectors targeted by China, such as Artificial Intelligence (AI), robotics and big data. 

  • European SMEs and start-ups with technologically advanced features e.g., advanced materials, AI, ICT, Fintech, etc. who would like to enter the Chinese market. 



The term “Silicon Dragon” was formed in 2008 by Forbes journalist, author and media entrepreneur Rebecca Fannin in her book “Silicon Dragon: How China Is Winning the Tech Race”. It referred to the first generation of Chinese internet entrepreneurs -- the founders of China's three tech giants with (collectively known as BAT), Robin Li of Baidu in search, Jack Ma of Alibaba in e-commerce and Pony Ma of Tencent in gaming and messaging. Nowadays “Silicon Dragon” is commonly used to describe innovative tech-based companies in China, in particular those in the Information and Communication Technology (ICT) sector, such as the aforementioned BAT, telecom innovator Huawei Technologies and ByteDance, the developer of the video-sharing social networking services and app TikTok.  

China’s Silicon Dragon is rising. As innovation has been made as a top priority by the Chinese government to achieve innovation-led economic growth, Chinese tech-companies have been innovating at the intersection of mobile, social and commerce to create some of the most valuable businesses across the globe. In 2019, Baidu, Alibaba, and Tencent (BAT) represented a combined market capitalisation of over USD 1 trillion and China overtook the U.S. in the number of “tech unicorns”, companies valued at USD 1 billion or higher based on fundraising. 

China’s tech market is booming. It was estimated that technology spending in China will hit USD 174 billion in 2020 as the Chinese government and enterprises leverage digital technologies to further drive transformation and improve adaptability in a challenging economic environment. Cloud computing, big data, internet data centres and the internet of things (IoT) sectors witnessed robust growth in revenue during the first half of 2020. It was expected that China’s ICT industry will see improved growth during the second half of 2020, thanks to the increased “new infrastructure" construction and 5G adoption - by the end of June 2020, the country had set up 410,000 5G base stations in total, with 257,000 being set up in the first half of 2020; in terms of 5G adoption, China now has 66 million users whose 5G smartphones are connected to the internet. 


On Level 2 you can find information about technological development and advancement in BAT, while Level 3 will tell you more about business activities (through case studies) and what the EU has contributed in China. 



This page will offer a brief overview of technological development and advancement in the Chinese innovative companies.


Baidu is a tech company specialized in internet-related service products and AI. Baidu is most well-known for being China’s dominant search engine and it also offers a wide range of bespoke online services, including Baidu Encyclopaedia, Baidu Government Information Search, the social network Baidu Space and e-commerce platform Baidu Youa.

Baidu is known for pushing the limits of AI while achieving implementation of AI capabilities across its products and services. Baidu ranked the top in the number of AI-related patent applications in China, generating 5,712 patents in total, as of October 2019; deep learning (1,429), natural language processing (938), and speech recognition (933) represent almost 60% of these patent applications. In fact, as early as in 2014, Baidu became the first to pioneer and apply deep learning, among all the BAT giants. One year later, AI algorithms developed by the company had surpassed human beings in speech recognition in Chinese. In 2019, Baidu launched SMLTA, the industry’s first streaming multi-layer truncated attention model for large-scale online speech recognition, which not only significantly increases the speed and accuracy of speech recognition, but also enables products to recognize Chinese-English mixed speech and six major Chinese dialects. 

For the past three years, Baidu has also been developing autonomous driving technology with over 100 industry partners as part of its “Apollo” project. The platform is an open platform designed to accelerate the large-scale deployment of autonomous driving technology across China. Apollo is well-trained – it has by far completed over six million kilometres of road testing with zero accidents and carried over 100,000 passengers across 27 cities around the world. In 2020, Baidu announced that the AI-powered system is able to independently driver the vehicle without human intervention, owing to its new fully automated driving technology incorporated with the 5G Remote Driving Service. 


Alibaba Group is China’s largest-listed tech company, which is specialized in e-commerce, retail, internet, cloud computing, digital payment and technology., was originally a business to business (B2B) platform, later Alibaba Group became also home to both Tmall, a business to customer (B2C) marketplace, and Taobao, a customer to customer (C2C) platform - China’s top e-commerce platforms. The websites of these three platforms are all ranked amongst the busiest ten sites in the world for traffic, with annual active customers reaching 742 million for the 12 months ended June 30, 2020, representing a quarterly net increase of 16 million. 

Alibaba used new technologies to empower its e-commerce platform and logistics system. Smart Touch, an application developed by Tsinghua University and the Alibaba Joint Research Lab for Natural Interaction Experience, with the aim of assisting shoppers that are visually impaired. The mobile-based application is able to understand different mobile user interfaces through AI and intelligent human-machine-interaction (HMI) technology to provide the relevant audio and haptic interactions. Through speech interaction, Smart Touch enables visually impaired consumers to obtain information about each product, with the haptic buttons on a special sheet allowing for easier mobile interface navigation. As for the development of its logistics system, Alibaba heavily invested in developing Cainiao Smart Logistics, a central platform to link a network of logistics partners in order to handle millions of packages it needs to deliver. Cainiao’s new smart warehouse is equipped with 700 automated guided vehicles (AGVs), which is the largest robotic smart warehouse in China, using loT to automatically direct AGVs to drive, load, and unload. According to Alibaba, the operating efficiency of Cainiao’s smart warehouse is 50% higher than traditional ones. In addition, Tmall Global, Alibaba Cloud, and Cainiao jointly developed a global tracking system which uses IoT and blockchain technology to verify products purchased by consumers through dual authentication and two-way encryption, while tracking the real-time location of items through location-based services and GPS. 

Alibaba’s Ant Financial Services Group (Ant) operates Alipay, the world’s largest mobile and online payments platform, with users exceeding 1.2 billion worldwide, as of the end of 2019. Alipay is the world’s first commercial application of a payment system that identifies payers using facial-recognition technology. The application is powered by the Face ++ technology developed by Beijing start-up Megvii, and it only takes one to two seconds to recognize and identify a face, which follows the scan with a second verification through a mobile phone. AI technology is central to Ant’s business development and it is used across the company’s new and existing products and services. For instance, it continues to invest in the “smart customer service” system which applies deep learning to carry on conversations with customers and answer their queries, and it has recently surpassed human performance in terms of customer satisfaction; the company also launched a voice-recognition system that enabled users on the Alipay platform to purchase flight tickets and book hotels using their voices, which make travel booking more convenient and user-friendly. 

Alibaba’s AI technology has also been deployed for building smart cities. Its AI cloud platform “ET City Brain” uses AI algorithms to predict outcomes across traffic management, healthcare and urban planning, crunching data from cameras, sensors, social media, and government data. As of 2019, City Brain has been implemented in 23 cities across Asia, offering services to customers in 48 different specific application scenarios covering 11 major areas of city life, including transportation, urban government, cultural tourism, and health.


Tencent’s Wechat is an all-in-one platform which combines social messaging, mobile payments, and in-app programs that are portals for shopping and gaming. Wechat was initially launched as a texting service in January 2011 and it started to grow rapidly with the introduction of voice messaging in May. One year later in 2012, Wechat Moments was released, which allows users to create an intimate and private communication circle with their choice of friends. The launch of the Wechat Pay enables users to buy products directly through their smartphones. Building on the ancient Chinese custom of giving red envelopes filled with money on special occasions, the Red Packet feature enables users to send small amount of digital money to friends online. Recently the introduction of in-app Mini Program feature appeared as the latest in a long line of innovations at Wechat. Mini Program refers to applications typically smaller than 10 megabytes that can run instantly on the main app’s interface and it enables users to access other programmes within Wechat.  

Tencent is currently focusing on medical AI technology research and its YouTu Lab has launched its first medical imaging product - healthcare AI platform “Miying”. Miying was designed to assist healthcare institutions in AI-driven cancer diagnostics and the system has supported cancer screening for ophthalmic diseases, esophageal cancer, colorectal cancer, lung cancer, breast cancer, cervical cancer, cooperating with more than 100 top 3A hospitals in China.


This section will centre on relevant stakeholders and their actions contributing to technological and development in China. 

Presence of local and global tech-based companies in China

Chinese tech platform Meituan-Dianping was ranked by the US business media outlet Fast Company as the world's most innovative company in 2019, followed by China’s e-commerce giant Alibaba, social shopping application – Little Red Book, Information and Communication company - Sougou, and robotics and AI start-up based in Shenzhen - GJS Robot, among the others. Meituan-Dianping’s application connects consumers with local businesses for food takeout, hotel bookings, and movie tickets, among many other services. In the first half of 2018, it facilitated 27.7 billion transactions (worth US $33.8 billion) for more than 350 million people in 2,800 cities. 

Additionally, a number of global corporations like Microsoft, IBM, Ericsson, Bosh and Siemens have been contributing to technological development in China. Ericsson is a Swedish multinational company and a leading provider of ICT to service providers. In November 2019, Ericsson and Chinese tech firm OPPO, whose products include 5G handsets, launched a joint lab in the Chinese city of Shenzhen focused on 5G innovation and the lab will see the companies collaborating on a range of initiatives to optimize 5G network performance. 


China-EU S&T Collaboration 

The China-EU S&T cooperation is governed by an S&T Cooperation Agreement signed in December 1998 and renewed for the third time in December 2014. The implementation of the Agreement is overseen by a Joint Steering Committee. In addition, a dedicated High-Level Innovation Cooperation Dialogue (ICD) has been set up through a joint declaration signed in September 2012. The ICD aims at raising the level and intensity of research and innovation relations with China by providing a forum for discussion respective innovation policies and systems, addressing framework conditions and launching new joint R&I initiatives. Both sides have agreed to boost cooperation with a package of flagship initiatives targeting the areas of food, agriculture and biotechnologies, environment and sustainable urbanization, surface transport, safer and greener aviation, and biotechnologies for the environment and human health.


China-EU cooperation projects

  • In 2017, Baidu signed two contracts with German companies - Continental and Bosh, aiming at developing autonomous driving options. Baidu expected to upgrade the intelligent systems of the automobile industry and energize many existing and emerging industries through the agreement with Continental while the collaboration with Bosh will focus on an in-depth technical cooperation and Bosh would be able to work in Baidu’s Apollo project in the future. 

  • In 2018, Alibaba established three partnerships on AI-backed connected vehicles services with leading European carmakers, Audi, Daimler and Volvo. Under the cooperation, owners of Daimler, Audi and Volvo cars in China would be able to remotely access information about their vehicles, including location, engine status and fuel checks by using Alibaba's voice assistant service.

  • In 2019, Tencent Cloud IoT Division of Tencent Group and STMicroelectronics (STM), a Swiss-domiciled multinational electronics and semiconductor manufacturer announced their cooperation on Tencent’s latest IoT operation system, TencentOS Tiny LoRaWAN. The collaboration between Tencent and STM will allow simple, seamless access to the one-stop software solutions on the Tencent Cloud IoT Explorer platform for faster time-to-market of large-volume IoT applications.



Last updated: 15.12.2020 - 16:18
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