Impressive and rapid developments are complicated by the Communist regime’s approach to AI expansion.

By Probe International

China’s rapid advancements in AI, exemplified by DeepSeek’s open-source R1 reasoning model, have unsettled markets and the AI community.

The impressive rise of Chinese AI is complicated, however, by China’s rogue and unlawful approach to its AI expansion, argues a new report from Uganda’s PML Daily.

A closer look through the lens of China’s “documented history of technological deception,” reports the Daily, reveals an approach characterized by intellectual property theft, technological espionage, and the manipulation of technology for propaganda and surveillance purposes. [See: The Rise of Chinese AI: A Pattern of Technological Deception].

The Chinese AI company, DeepSeek, exhibits hallmark signs of Beijing’s influence, PML Daily notes. This includes selective censorship and its refusal to answer questions about sensitive topics such as President Xi Jinping, the Communist Party, or Taiwan. Instead of genuine innovation, this behavior points to China’s real priority: control.

China’s history of embedding surveillance capabilities in exported technology raises concerns about DeepSeek’s potential role as a data collection tool for Chinese intelligence services. Chinese AI companies are legally required to share data with intelligence agencies under the National Intelligence Law of 2017, posing a security threat to user privacy globally.

An interesting point of note, continues the PML Daily report, is the emergence of DeepSeek, which follows the Chinese Communist Party’s “playbook of introducing supposedly superior technology at crucial moments to undermine Western market confidence and technological initiatives.”

As for the AI advancements China trumpets to the world, these are often built on appropriated Western innovations, as evidenced by forced technology transfers from foreign companies operating in China. This practice mirrors China’s documented history of falsifying research papers and exaggerating capabilities across multiple sectors.

Along with technological deception, market manipulation is another strategy employed. This involves initial market penetration with “massive state subsidies and protected domestic markets,” bolstered by data collection and eventual market dominance through predatory pricing. The creation of state-backed technology companies, disguised as private enterprises, raises concerns about the true ownership and control structure of companies, including DeepSeek. Beijing’s strategic deployment of AI tools aligns with its censorship apparatus, as seen in DeepSeek’s avoidance of politically sensitive topics.

The use of AI for domestic surveillance and minority suppression in China also raises serious ethical questions about the deployment of Chinese AI tools internationally. DeepSeek’s development likely benefits from the CCP’s systematic collection of global data and intellectual property through both legal and illegal means.

“Killing the geese that laid the golden eggs”

Meanwhile, new reassurances from President Xi Jinping aimed at restoring confidence in the country’s beleaguered private sector—grappling with weak domestic demand, falling profits, and global trade tensions—marks a shift in attitude. The significant expansion of China’s private sector in recent decades has posed a conundrum for Xi Jinping and his vision of socialism, which has led to a reassertion of party-state authority over areas where the private sector has grown rapidly.

Journalism professor and former South China Morning Post editor, Wang Xiangwei, cites the success of DeepSeek, the animated blockbuster “Ne Zha 2,” and the popular game “Black Myth: Wukong,” all from private producers, as demonstrating the value of allowing the private sector to operate without excessive government intervention.

The lack of confidence or “lying flat” tendency among private entrepreneurs is now a major risk for the economy, says Wang. To that end, the National People’s Congress is fast-tracking laws to promote the private sector and has established a bureau of private economy at national and local levels. However, says Wang, many entrepreneurs remain skeptical.

Trans-province arrests of entrepreneurs involved in business disputes and “distant fishing” operations by police, says Wang, are rooted in illicit, profit-driven law enforcement actions by local authorities. These illegal practices have struck fear in the private sector and undermine the sector’s long-term potential by “killing the geese that laid the golden eggs.”

The recent symposium between President Xi Jinping and private enterprises, the first such meeting since 2018, signaled the strongest support yet for the private sector, leading to a pledge by the National Development and Reform Commission to halt illegal activities. However, no such statements have come from the Ministry of Public Security, which is responsible for these actions, writes Wang. The government, he says, should also eradicate the rampant use of exit bans, which have prevented many private entrepreneurs, including Hong Kong-based businessmen and fund managers, from leaving the Chinese mainland. These practices have made foreign investors and private entrepreneurs wary of the investment climate in China.

Turning his attention to the business climate in Hong Kong, Wang says there is a lack of clear governance strategies among mainland officials “of how to run a capitalist city like Hong Kong.” Local officials, he says, need to be more proactive in presenting well-articulated plans to Beijing. The failure to do so has led Chinese officials to issue detailed instructions to Hong Kong, which inadvertently worsen the perception of Hong Kong moving towards “one country, one system.”

According to Wang, the central government and Hong Kong need to establish new parameters and engage in discussions to determine what actions are feasible and what are not under the current circumstances. Additionally, there are concerns that bureaucratic inertia and formalism, driven by officials’ fear of making mistakes that could harm their careers, have become significant barriers to China’s economic recovery. How can Beijing motivate local cadres to overcome these challenges, asks Wang.

But therein lies the problem. Beijing cannot motivate these cadres. Entrepreneurs are self-motivated by confidence that law of rule prevails, not rule by law, which it clearly no longer does in Hong Kong.

(Ironically) the image used for this article is AI generated.