Deloitte: China Sitting Pretty as a World Leading Tech Leader in 2019 and Beyond

China is predicted to continue to have world-leading telecommunications networks in 2019, and is paving the way for several industries that could generate tens of billions of dollars in annual revenue, according to a new report by Deloitte.

Those industries include machine vision, or biometric facial recognition, on mobile phones to buy groceries or to gain access to public transportation, new retail concepts and social credit, which is based on a person’s relationships, personal behavior and characteristics, buying habits and ability to fulfill contractual obligations.    

“As of the middle of 2018 nine of the 20 largest tech companies in the world by market valuation were headquartered in China, with the other 11 based in the United States,” notes the 112-page Deloitte Technology, Media and Telecommunications Predictions 2019 report. “Over the next five years, these rankings are likely to be keenly contested. Companies that are able to scale their ideas fastest are likely to end up stronger.”

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China, which the U.S. has long been accused of widespread theft of intellectual property, is projected to have 330 million full-fiber connections, or 70 percent of the world’s total, is likely soon to have the world’s largest 4G network, with 1.2 billion subscribers, and is posed to lead in the 5G market, with 430 million subscribers projected for 2020.

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Only a few decades ago, China was regarded as little more than the world’s cheap manufacturing and assembling hub, and considered a somewhat minor global player. Since then, it has steadily moved up manufacturing’s value chain. By leaning from decades of manufacturing and by supporting its strongest digital businesses, China has bootstrapped its capabilities to produce some of the world’s largest companies and most advanced products,” the report notes. “With strong coordination between the state and domestic manufacturers, China is wielding a great deal of capital and its massive market to advance its agenda.” 

What’s Your Social Credit Score? 

The city of Rongcheng, China, will take points from a person’s social credit if they get a traffic violation, but will reward that person for doing community service or making a charitable donation. Those who choose to participate in social credit programs could stand to benefit by not having to travel with less supporting documentation, faster check-ins at hotels and receiving low interest rate loans.

Trials of social credit have been developed by private companies in the Unites States and United Kingdom, but in China, social credit is expected to be deployed on a national scale,” according to the report. “One social credit system has already been set up in China with the launch of the Sesame Credit by Ant Financial, part of Alibaba, in 2015. Local governments have also set up social credit systems.” 

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A person’s social credit in the communist country is determined by their: 

  • Credit history, which includes their payment records
  • Ability to fulfill contractual obligations
  • Personal characteristics
  • Behavior and preferences, including buying habits and time spent playing video games
  • Interpersonal relationships

Machine Vision  

While the U.S. and a number of other countries around the world are testing facial recognition technology at airports and ports of entry, China is working to become a leader in facial authentication by employing facial biometric recognition technology.

“In the long term, one’s face may be the identifier used to authorize payment for everyday goods, or to verify access to public transport systems,” Deloitte notes. “In China, facial recognition has been used on a trial basis to regulate access to train stations and airplanes, pay for fast food, verify the identity of taxi drivers, track the attendance of university students and check into dormitories. One of the largest Chinese companies in this space, SenseTime, has stated that its software is used in Guangzhou, a city of about 25 million, to match surveillance images from crime scenes to photos in a criminal database. The system deployed in Guangzhou has identified more than 2,000 suspects so far.” 

READ THE FULL REPORT HERE 

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Multimedia journalist James Cullum has reported for over a decade to newspapers, magazines and websites in the D.C. metro area. He excels at finding order in chaotic environments, from slave liberations in South Sudan to the halls of the power in Washington, D.C.

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