Former central bank chief Zhou warns that AI will likely increase income inequality and China should prepare

  • AI
  • Tuesday, 05 Nov 2019

The former PBOC governor says policies should be put in place to guide AI development – specifically what the technology can and cannot do – along with tax policies. — SCMP

Zhou Xiaochuan, the former governor of China’s central bank, has warned that the development of artificial intelligence (AI) will have a huge impact on jobs, further increasing income inequality between skilled and unskilled workers.

Zhou, who retired last year from the top job at the People’s Bank of China, said he expected that more and more people will “be moved out” from the industrial and manufacturing sectors because of changes brought by new technologies such as AI.

“High quality talent will have a bigger role to play in society while ordinary jobs will be taken over by robots,” said the 71-year-old Zhou at the 2019 Forum on Global Science and Technology Development and Governance in Beijing on Nov 2. “Some less skilled workers are likely to end up with low-paying jobs even if they are not replaced by machines, therefore the income gap will widen.”

Zhou’s comments come amid growing rivalry between China and the United States over global AI supremacy with China’s State Council issuing a three-step plan in 2017 to make the country a global leader in the technology by 2030. Competition between the two countries in the field spans university research labs, tech companies and a raft of real-life applications, with both countries seeing mastery of AI as a key to future economic and military security.

While the US may have a research edge, China is seen as having a data advantage – considered the oil of AI – due to having the world’s largest online population as well as people’s relative openness to adopting new technology.

Zhou, who currently serves as vice-chairman of the Boao Forum – known as Asia’s Davos – after he retired as the longest-serving central bank governor in 2018, called for public policies to prepare for AI’s impact on jobs and income inequality.

Policies should be put in place to guide AI development – specifically what the technology can and cannot do – and tax policies should also be put in place to adjust income distribution, said Zhou.

About 2.3 million finance industry employees in mainland China are likely to either lose their jobs, or be reassigned to new roles, by 2027, as they fall victim to disruptive AI technologies, according to a study by Boston Consulting Group in 2018.

The study found that 23% of a total of 9.93 million jobs in the country’s banking, insurance and securities sectors will be affected, with entry-level staff engaged in repetitive daily operations bearing the brunt of any cuts. – South China Morning Post

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