Official predicts 100 AI breakthroughs

 

 
Wave of innovation set to change economy

New wave: Signage outside DeepSeek’s office in Beijing. The company’s AI is considered much cheaper to set up than Western competitors. — Reuters

Beijing: China’s advantages in developing artificial intelligence (AI) are about to unleash a wave of innovation that will generate more than 100 DeepSeek-like breakthroughs in the coming 18 months, according to a former top official.

The new software products “will fundamentally change the nature and the tech nature of the whole Chinese economy,” Zhu Min, who was previously a deputy governor of the People’s Bank of China, said during the World Economic Forum in Tianjin yesterday.

Zhu, who also served as the deputy managing director at the International Monetary Fund, sees a transformation made possible by harnessing China’s pool of engineers, massive consumer base and supportive government policies. 

The bullish take on China’s AI future promises no letup in the competition for dominance in cutting-edge technologies with the United States, just as the world’s two biggest economies are also locked in a trade war.

The United States sees China as a key rival in the field of AI, especially after DeepSeek shocked the global tech industry in January with its low-cost but powerful model. 

In addition to efforts to prevent China from securing advanced semiconductor manufacturing equipment, Washington is blocking Chinese companies from acquiring Nvidia Corp’s high-end AI chips for training, citing national security concerns.

Beijing is now pinning its hopes on domestic tech giants like Huawei Technologies Co when it comes to advanced chipmaking. 

The emergence of DeepSeek triggered a rally in China’s tech stocks, fuelling optimism over Chinese competitiveness despite tensions over trade with the Trump administration and economic challenges at home.

Bloomberg Economics estimates the contribution of high-tech to China’s gross domestic product (GDP) climbed to about 15% last year – from near 14% a year earlier – and could exceed 18% in 2026.

Despite a tariff truce negotiated a month ago with the United States, American levies are still at high levels, with a more lasting deal still in question. 

Zhu said the United States will likely see inflation pick up starting in August, as it takes some time for tariffs to feed through to the economy and for companies to use up stockpiles they accumulated before Trump hiked duties. 

“The uncertainty brought by US tariff policy is an important factor that may lead to negative growth in global trade this year,” Zhu told reporters on the sidelines of the forum.

“The entire trade industrial chain has begun to slow, investments has begun to stop, so the impact is greater than the actual tariff rate.”

The World Economic Forum meeting in Tianjin, also known as “Summer Davos”, has attracted global business executives and world leaders. 

Singaporean Prime Minister Lawrence Wong and Vietnamese Prime Minister Pham Minh Chinh are scheduled to speak at the three-day event.

Chinese Premier Li Qiang is expected to address the conference during the opening plenary today and meet with participants.

Despite a tariff truce negotiated a month ago with the United States, American levies are still at high levels, with a more lasting deal still in question.

Analysts polled by Bloomberg forecast GDP will slip to 4.5% this year, significantly below the official target of around 5%. It expanded 5.4% in the first quarter.

“The uncertainty brought by US tariff policy is an important factor that may lead to negative growth in global trade this year,” Zhu told reporters on the sidelines of the forum. “The entire trade industrial chain has begun to slow, investments has begun to stop, so the impact is greater than the actual tariff rate.”

Zhu said the United States will likely see inflation pick up starting in August, as it takes some time for tariffs to feed through to the economy and for companies to use up stockpiles they accumulated before Trump hiked duties.

Despite shocks from abroad, China’s GDP likely grew faster than 5% in the second quarter, according to Huang Yiping, a member of the Chinese central bank’s monetary policy committee. Speaking on another panel at the Tianjin forum, he pointed to the economy’s solid performance in April and May.

But despite strong retail sales in May, when they grew at the fastest pace since December 2023, Huang said China still needs to address the issue of insufficient consumption. — Bloomberg

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Report reveals China's innovation-driven development is gaining steam

A report from China's State Council on Tuesday revealed that the country has made notable strides in advancing innovation-driven development, and that its innovation-driven strategy has been gaining momentum.

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Beijing: We have ‘will and means’ to counter tariffs

ation: Liu Rui/GT -    

DeepSeek | 深度求索

Big buyer: A container ship leaving Qingdao, China. United Nation’s data show US exports to China rose 684% between 2001 and 2024.— AP

BEIJING: China has called on the United States to remove unilateral tariffs as quickly as possible and work with it in the spirit of mutual respect, peaceful coexistence and win-win cooperation, in order to address respective concerns through dialogue and consultations on an equal footing, the Commerce Ministry says.

Chinese officials said on Wednesday that should Washington further intensify tariffs and restrictive measures against China, Beijing has the “firm will and abundant means” to fight until the end.

Their comments came after the State Council Information Office released on Wednesday a white paper titled China’s Position on Some Issues Concerning China-US Economic and Trade Relations, which noted that the recent US move of using tariffs as a coercive tool is a grave mistake and further exposes the typical unilateralist and bullying nature of the US government.

Since US President Donald Trump took office in late January, Washington has repeatedly imposed additional tariffs on China, and the tax rate on Chinese imports has now reached over 120%.

Noting that these actions could have a severe impact on China-US economic and trade relations, the white paper emphasised that the key is to respect each other’s core interests and major concerns and find proper solutions through dialogue and consultation.

The essence of China-US economic and trade relations is one of mutual benefit and win-win cooperation, despite the inevitable differences and friction that arise between the two countries due to their different stages of development and distinct economic systems, according to the document.

Trade data from the United Nations shows that the value of US goods exported to China reached US$143.55bil last year, up 648.4% compared with the US$19.18bil recorded in 2001.

The growth in US exports to China has far outpaced the 183.1% increase in overall US exports during the same period.

Detailing the white paper, a Commerce Ministry official said, “With firm will and abundant means, China will resolutely take countermeasures and fight until the end if the United States insists on further escalating economic and trade-restrictive measures.”

There is no winner in a trade war, and China does not want a trade war, the official emphasised, adding that the Chinese government “will by no means stand idle when the legitimate rights and interests of its people are being hurt and deprived”.

The official said that it is a typical act of unilateralism, protectionism and economic bullying for the United States to take tariffs as a weapon of exerting maximum pressure and pursuing self-interest.

Under the guise of pursuing “reciprocity” and “fairness”, the United States is engaging in zero-sum games and, in essence, seeking “America First” and “American exceptionalism”, the official said.

The United States is exploiting tariffs to subvert the existing international economic and trade order, prioritising US interests above the global common good, and sacrificing the legitimate interests of countries worldwide to serve its own hegemonic agenda, he added.

Noting that the United States is also deliberately severing the well-established global industrial and supply chains and breaking market-oriented free trade rules, the official said these practices seriously interrupt the economic development of countries around the globe and affect the long-term stable growth of the world economy.

Lin Jian, a spokesman for the Foreign Ministry, said at a daily news conference on Wednesday that “if the United States disregards the interests of the two countries and the international community and stubbornly persists in the tariff war and trade war, China stands ready to fight to the end”.

Cui Fan, a professor of international trade at the University of International Business and Economics in Beijing, said, “A trade war, for sure, produces no winner, but the United States is destined to suffer greater losses than others.”

On Tuesday, Goldman Sachs raised the odds of a recession in the United States to 45%, just a week after it said the odds were at 35%, as fears of an impending trade war increased.

It also revised its forecast for this year’s gross domestic product growth in the United States to 1.3%, down from 1.5% and cautioned about the possibility of a bear market.

Cui said the US tariff hikes will estrange allies, disrupt market dynamics, and provoke retaliatory actions that will reverberate throughout supply chains and hit US consumers hard.

More importantly, the measures fail to provide a clear path for the United States to regain its competitive edge in key industries, he added.

Navin Girishankar, president of the Economic Security and Technology Department at the Centre for Strategic and International Studies, said, “You can’t fight a trade war and then expect to win a tech war.”

Highlighting industries such as semiconductors, artificial intelligence and clean energy that largely rely on international collaboration, Girishankar said that tariffs would increase costs and reduce efficiency, eroding the ability of the United States bto compete in such sectors. — China Daily/ANN

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