SCATTERED, SMOTHERED, AND COVERED.  In Fortune‘s July 2018 cover package is a story about China’s advantage in the race for A.I. dominance. It opens with an anecdote about a guy at a May concert in Jiaxing who boosted $17K worth of potatoes; the concert was attended by 17,000 people, and algorithms used security footage to match him to a “most wanted” database, which lead to his arrest.

A ‘RED’ WEDDING OF INTERESTS. Fortune‘s most substantial argument for why China is winning the A.I. race? Quote-unquote “structural advantages” like “data, computing power, and competent engineers.” But, let’s get real: China’s got another advantage that Fortune might not want to delve into, given how much it complicates what’s an otherwise simple narrative.

A ‘RED’ HERRING. Let’s be real: The fact that China’s surveillance state has nearly unparalleled powers (especially when compared to the rest of the industrialized nations with countries ostensibly participating in the A.I. race) gives companies working in the A.I. sector there a proving ground for development unlike any other in the world. That’s to say nothing of the fact that Chinese capitalism’s biggest actors (i.e. massive private sector entities) are also incentivized (i.e. compelled by the Chinese government) to work hand-in-hand with the Chinese government’s interests if they want to have any chance to further up the economic food chain.

CHINA’S A.I. ADVANTAGE, DECODED: The proving ground for A.I. implementation that is China — a country open to automated monitoring, censoring, and identification of its citizenry — gives China an advantage in the race for A.I. Of course it does, and it probably won’t come up for discussion too much by those participating in it. Why risk the business? In other words, of course China’s winning the A.I. race, when one of the development resources they have is unobstructed access to data. But is it at a moral cost other competing nations would be so willing to obviously incur, and given a choice, one their citizens wouldn’t push back against? (Probably not.)

READ MORE: Why China Has an Edge In the A.I. Arms Race [Fortune]