Eleven days before the AIDP was released, on 9 July 2017, the Hangzhou AI Town (杭州人工智能小镇) opened for business, with the mission to link together e-commerce company Alibaba, Zhejiang University, graduates returning from overseas and local businesses in an AI cluster. This AI park does not exist in a vacuum. It is housed within the Hangzhou Future Sci-Tech City (HFSTC) which itself is connected to a larger infrastructure of science and technology (S&T) parks in Hangzhou. Initiated after visits by Zhejiang provincial leaders to Silicon Valley, the driving force behind HFSTC is to cultivate knowledge spillovers and agglomeration benefits similar to those that flow to Silicon Valley.

The Hangzhou AI Town’s 2019 audit report, which provides a breakdown of funding allocations, offers some preliminary indications of the town’s progress. It disbursed 43 million RMB in funding in 2019, separated into research and development (R&D) funds, subsidies for office fees and cloud services funds. Across the three categories, the 123 accepted project proposals spanned an extensive range of subdomains (from sign language translation using computer vision to predictive analytics of smart city data) and parts of the AI stack (from open source software to end devices). Moreover, the very existence of transparent, budget-line disclosures of how much funding was allocated to which companies is refreshing in that it demonstrates that there is something substantive happening.

One concern is whether Hangzhou AI Town can sustain development beyond Alibaba, whose influence dominates much of the funding breakdown. For instance, a project to industrialise the use of big data to discern risks to public safety received the most funding in both the R&D and office fees category. The company, Chengying Shuju (杭州橙鹰数据), is a subsidiary of Alibaba. Alibaba Cloud was the sole supplier or co-supplier for 25 of the 27 projects in the cloud services category.

While the benefits of S&T parks are often viewed through the lens of local spillover effects, extra-regional and international linkages may be even more significant. For HFSTC, one connection that is particularly meaningful is to Silicon Valley, which inspired the creation of the S&T park. The Bay Area Council has an office in HFSTC that helps Californian companies register new enterprises. In addition, HFSTC issued guidelines to attract domestic and international talents to accelerate the development of the AI industry in July 2017, offering 3 million RMB in settling expenses and 15 million RMB in subsidies for office space costs. Overall, Hangzhou boasted the highest growth in attracting returning graduates from international universities from 2017 to 2018, according to a report by recruitment site Boss Zhipin.


Jeffrey Ding

DPhil researcher and China lead at the Centre for the Governance of AI, University of Oxford’s Future of Humanity Institute