Generation 40s – 四十世代

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China accelerates towards a driverless future as Hong Kong stalls

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CommentInsight & Opinion
2017-10-26
Wilson Wong says mainland China’s intensive investment and flexible workforce make it the ‘holy grail’ for autonomous cars, in contrast to Hong Kong, where concerns about job losses dominate thinking

Today’s cities are on the precipice of a technological breakthrough, driven in part by a once-moribund automotive industry, now bolstered by revolutionary advances in microchip, sensor and artificial intelligence technologies and evolving into a cutting-edge industry dominated by hyper-intelligent networked autonomous driving systems.

The idea of an encroaching future where highly advanced driverless cars are inextricably intertwined with homes, infrastructure such as roads and bridges, offices and drones (also considered autonomous vehicles) is no longer a flight of fantasy, but imminent reality. The dawn of this sea-changing technology will significantly affect China, the world’s largest automotive market. Moreover, the Middle Kingdom has every intention of dominating this emerging field (part of its “Made in China 2025” mission) and the government has asserted that it would like to have highly, or fully, autonomous vehicles for sale by as early as 2021.

By 2026-2030, Chinese authorities plan to have some degree of automated or assisted driving system in every vehicle in the country. The sheer commercial potential of this impending technology explains China’s overwhelming interest; by 2035, the Boston Consulting Group asserts that the global driverless car market could be valued at US$77 billion (impressive, considering the industry is still nascent today).

China is blighted by reckless driving (more than 250,000 deaths annually in road accidents), pollution and massive traffic congestion, so the driverless car could be an idea whose time has come. Relative newcomers to the world of driving, many Chinese do not share the West’s love affair with it. This is clear from a 2015 World Economic Forum survey, where three-quarters of the Chinese polled said they would have no issue riding in a self-driving car, vis-à-vis half of their American counterparts.

A damaged sports car is pictured after it collided with another car on a road in Yiwu city in Zhejiang province, in April 2016. A high number of traffic accidents, coupled with ongoing congestion and pollution, have contributed to China’s interest in driverless vehicles. Photo: Imaginechina

Considering the immense scale of China’s bold autonomous vehicle ambitions, there will be no lack of doubters. For starters, laws governing autonomous vehicle use are non-existent despite the impending deadline. To be fair, the US itself is still sorting out this potential regulatory minefield.

The Chinese committee (supported by the Ministry of Industry and Information Technology) has only in the past year or so started examining all the infrastructure and regulatory guidelines related to autonomous driving.

Despite the obfuscation surrounding the regulatory frameworks on autonomous driving, leading Chinese technology firms such as Baidu (China’s answer to Google) have made impressive strides on the technical front. By 2016, the company said its autonomous vehicles possessed driving capabilities comparable to that of a fledgling driver; in general, many autonomous vehicles are still prone to stopping abruptly and relatively clumsy manoeuvring. In a daring act of corporate bravado, Baidu chief executive Robin Li drove his company’s yet-to-be-approved driverless vehicle across the streets of Beijing, earning the ire of authorities.

Despite the relative progress by the mainland in autonomous vehicles, Hong Kong has not made comparable advances nor does it seem to share the same ardour for this buoyant field. The Transport and Housing Bureau says most trials of driverless technology are still at the preliminary stages.

By contrast, Singapore, Hong Kong’s perennial rival, has secured the distinction of organising the world’s first trial run of six driverless taxis (albeit in a limited four-square-km area) in August 2016; the road to a driverless future is not entirely smooth, however, as one of the autonomous cabs collided with a truck barely two months after the successful trial.

In Hong Kong, as with many cities, some experts argue that the issue of acceptance rather than technology per se remains the greatest obstacle to successful widespread adoption of autonomous vehicles. In truth, it could be the technology’s capacity to inflict significant damage on the jobs front (at least in the short term) that has hampered implementation. In Hong Kong’s case, the impact of this revolutionary technology on the livelihood of the city’s 40,000 taxi drivers concerns policymakers; the same fate could await thousands of bus drivers steering Hong Kong’s extensive network of double-deckers and minibuses. Similar concerns have also been expressed about the technology’s impact on the job security of the city’s numerous delivery truck and van drivers. In a city already buffeted by skyrocketing property prices and escalating income inequality, the prospect of widespread unemployment among working-class drivers presents a tinderbox for this highly strung metropolis.

Conversely, in mainland China, with its considerably larger job market, it could be easier for displaced cab and delivery drivers to secure jobs with similar levels of pay.

In the world of autonomous driving, China is evidently the holy grail, offering a near limitless pool of commercial and scientific possibilities. The efficacious top-down approach of Chinese industrial planning and near-universal acceptance among the Chinese public has positioned the country as the future of autonomous driving; even Hong Kong’s government recognises the inevitability of autonomous driving and has taken initial steps to incorporate this development into its smart city plans.

Machine operatives fit oil feed pipes to engine blocks at the Ford Motor Company’s engine assembly plant in Dagenham, UK, on October 9. Ford’s CEO Jim Hackett has pledged accelerated work on green and driverless vehicles, but traditional carmakers like Ford and GM face stern competition from tech companies like Google, Apple and Baidu. Photo: Bloomberg

This contrasts starkly with the US (the birthplace of autonomous driving) where each of the states are laden with various significant regulations. Chinese firms continue to inject billions of dollars into autonomous vehicle R&D; in just the first quarter of 2017, China’s driverless vehicle industry attracted nearly US$1 billion in research funding.

However, some market participants urge investors to be more circumspect, as exit strategies via IPOs are not assured unless confirmed buyers are lined up. Further, they speak of irrational exuberance building up in the rejuvenated automotive industry, drawing hi-tech non-traditional players (for example, Apple, Baidu, Google, Intel and Nvidia) with immense financial and technological wherewithal; these interlopers are now fighting tooth and nail for market share with traditional industry incumbents like General Motors, Ford, Delphi, Continental and Bosch.

Moreover, Chinese authorities have yet to adequately address the considerable legal and insurance hurdles wrought by this disruptive technology’s emergence. But given the considerable spoils awaiting the victors, there is no doubt that the governments concerned in Beijing and Washington, along with their respective firms, will marshal resources to surmount any obstacle in this race.

Wilson Wong Kia Onn is an assistant professor in the Department of Accounting and Banking at Chu Hai College of Higher Education

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