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The book examines the extent to which Chinese cyber and network security laws and policies act as a constraint on the emergence of Chinese entrepreneurialism and innovation. Specifically, how the contradictions and tensions between data localisation laws (as part of Network Sovereignty policies) affect innovation in artificial intelligence (AI). The book surveys the globalised R&D networks, and how the increasing use of open-source platforms by leading Chinese AI firms during 2017–2020, exacerbated the apparent contradiction between Network Sovereignty and Chinese innovation. The drafting of the Cyber Security Law did not anticipate the changing nature of globalised AI innovation. It is argued that the deliberate deployment of what the book refers to as 'fuzzy logic' in drafting the Cyber Security Law allowed regulators to subsequently interpret key terms regarding data in that Law in a fluid and flexible fashion to benefit Chinese innovation.
China’s fuzzy logic system and government support for pilot petri dishes is perfectly suited to the current state of AI research. This has enabled the rapid development of world-class AI applications, particularly in image recognition. This is due, in part, to the regulatory environment facilitating the development of AI pilots. Yet it is further argued that this suitability is due to a combination of three factors: (1) the current state of AI research and its applicability to numerous real-world applications; (2) the open nature of AI research culture globally; and (3) the complex emerging role of public–private petri dishes in China for testing innovative applications. The chapter also explains how public–private connections are formed, including how top-down government signalling is important to the trajectory of private companies.
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