DBS says China holds advantages over US in AI development
DBS says China holds advantages over the US in AI development due to its cost-effective models and dominance in rare earths, critical minerals, and global manufacturing. The bank expects a stable environment for US-China negotiations over the next year.
DBS has said that China and the US have different strengths in the development of artificial intelligence, with the US leading in cutting-edge technologies while China develops more cost-effective and efficient AI models.
DBS managing director and chief China/Hong Kong economist Ji Mo stated that China currently has more cards to play. These include its dominance in rare earths and critical minerals essential to the US, its role as a major buyer of US agricultural products, its influence in global financial markets including sizeable holdings of US Treasuries, and its central position in global manufacturing networks where supply-chain disruptions would affect US industries reliant on Chinese inputs.
She anticipates these factors will contribute to a relatively stable environment for US-China negotiations and expects this to continue for the next year. The presidents of the two countries are scheduled for two more meetings at APEC in November and the G20 in December.
DBS also noted that the potential of Hong Kong stocks remains limited by global liquidity tightening and weak demand in mainland China, holding a neutral view on the market.
"The market has already priced in expectations of more than three rate hikes by the US Federal Reserve, which is more hawkish than our estimate of two more hikes," said Moxy Ying Yuhua, equities strategist at DBS.