Home / Business and Economy / Central Banker Warns AI May Deepen China's Economic Woes
Central Banker Warns AI May Deepen China's Economic Woes
19 Sep
Summary
- AI deployment could exacerbate China's strong supply and weak demand imbalance.
- Reviving domestic demand is a key challenge for Chinese policymakers.
- Increased government borrowing is proposed to repair economic balance sheets.
Artificial intelligence could intensify China's existing economic challenge of strong supply meeting weak demand, according to Huang Yiping, a member of the People's Bank of China's monetary policy committee. This viewpoint was shared at an economic forum in Beijing on Saturday.
Huang indicated that the ongoing AI boom, while supporting exports, may prolong the contradiction between supply and demand. He emphasized the need for policies that boost consumption and repair balance sheets across the economy.
To address these issues, Huang advocated for increased market-oriented reforms to empower resource allocation by markets. He also suggested deeper overseas investment and industrial cooperation over sole reliance on exports.
Furthermore, Huang proposed that the central government increase borrowing to help mend the balance sheets of local governments, financial institutions, and companies. He argued that without restoring these entities' capacity for new economic activity, stimulus measures would have limited impact.
