The artificial intelligence (AI) market in China is expected to reach $11.9 billion by 2023, said a new white paper.

Driven by favorable policies, China's AI market is expected to account for 12 percent of the global total in 2019, with an annual growth of 64 percent, making it the world's second largest AI market, according to the white paper released by the global market intelligence firm International Data Corporation (IDC) and QbitAI, a Chinese technology media outlet.

The paper said Chinese enterprises increased their investment in AI technology this year, and the application scenarios of AI have become richer. The potential areas of China's AI market will focus on the fields such as service sector, health care and telecommunications.

According to the white paper, the lack of AI technicians and high-quality data sets are the primary challenges of AI development. Meanwhile, the unclear application scenarios and high project costs also hinder the development of the sector.

The paper also forecast that the market would reach 4.25 billion dollars by 2020, with an estimated annual growth rate of 51.5 percent.