China regulator says AI impact on macroeconomy still unclear
China's financial regulator says artificial intelligence's effect on economic growth, inflation and employment remains to be seen, urging policy preparedness. He noted that even if an AI bubble emerges, history shows such bubbles may not burst, and productivity gains could ultimately boost growth.
Xiao Yuanqi, deputy head of China's National Financial Regulatory Commission, said the impact of artificial intelligence on macroeconomic indicators such as economic growth, inflation and employment still needs to be observed. Speaking at the International Financial Leaders Investment Summit in Hong Kong, he said it is currently difficult to judge how long the current wave of technological revolution driven by AI will affect the economic cycle.
Xiao stressed the need for policy reserves in areas including macroeconomic policy, production and investment, asset pricing, and economic and financial risk prevention. He noted that global views differ on whether AI has created a bubble, but even if a bubble emerges, historical experience from previous major technological revolutions suggests it may not necessarily burst or cause an economic downturn.
He added that a significant increase in productivity could instead support economic growth. Xiao said the release of productive capacity is a gradual process that delivers dividends over time. Historically, short-term and localised asset bubbles have burst, but over the long term they have been absorbed and generated greater value.
On employment, Xiao said no significant changes have been observed in employment data published by various countries. He said AI development will also create new jobs, but warned that the long-term impact of AI on employment has yet to materialise. He called for attention to the potential substitution effect on the existing workforce.