\u201cThe U.S. Lead Over China in AI Is All But Gone.\u201d<\/p>\n
\u201cChina Is AI-Maxxing.\u201d<\/p>\n
\u201cChina Just Erased America\u2019s AI Lead.\u201d<\/p>\n
Those assessments of the artificial intelligence rivalry appeared in U.S. publications recently, and Xi Jinping will be pleased to have them in the air as he arrives in Washington this week for a state visit. Under Mr. Xi\u2019s leadership, China has made huge strides in developing the most consequential technology of our times. What will be less discussed is that he is also the leader of an economy in its worst shape in decades.<\/p>\n
The two facts are related.<\/p>\n
Economists in China \u2014 even those closest to the state \u2014 have openly warned that the government is pouring too many resources into a technology that creates relatively few jobs, while doing too little to save the broader economy.<\/p>\n
And it\u2019s an economy in crisis: The country\u2019s youth unemployment rate, excluding students, reached 18.9 percent in August. Consumers are not spending. During the first half of the year, domestic car sales fell markedly 20 percent from a year earlier, and housing sales fell another 14 percent, adding to years of decline. The country is in a deflationary spiral.<\/p>\n
This summer, the economists\u2019 warnings became a chorus. Li Daokui, a former adviser to the country\u2019s central bank and a professor at Tsinghua University, said in July that China\u2019s economy was \u201crunning too cold.\u201d Its booming high-tech sectors, he said, could not lift the larger base.<\/p>\n
Liu Shijin, another former adviser to the central bank, proposed at a forum in June to raise basic pension payouts, from $30 to $150 per month, for rural residents to shore up consumer demand.<\/p>\n
At the same forum, Huang Haizhou, an adviser to the central bank, said Beijing must foster mild inflation and corporate profitability before sustained technological advancement could occur. \u201cA country mired in deflation cannot achieve technological innovation,\u201d he said.<\/p>\n
The economists\u2019 comments were earlier reported by Bloomberg<\/a> and Chinese media.<\/p>\n The exact amount of government support for artificial intelligence is difficult to know. Stanford\u2019s AI Index Report<\/a> noted that state-initiated investment funds deployed an estimated $184 billion into A.I. firms from 2000 to 2023. Last year, Mr. Xi instructed the government to use every tool at its disposal, including tax breaks, government contracts, financing and access to infrastructure, to advance A.I. And, according to Bloomberg<\/a>, China is preparing to spend around $295 billion over the next five years to build data centers across the country, which will be operated by state-owned firms.<\/p>\n The Chinese economists\u2019 bluntness was itself revealing, as was the timing, just ahead of the regular midyear meeting of China\u2019s ruling Politburo. They have been warned against sounding too pessimistic, and some have been censored or silenced for doing so. That these establishment figures were speaking so starkly right before the leadership was about to calibrate economic policy suggested how alarmed they had become.<\/p>\n Taken together, their message was clear: the Chinese economy was in trouble and an A.I.-centered allocation of resources could prove costly to ordinary people\u2019s livelihoods and the country\u2019s economic future.<\/p>\n