Huang Yiping: AI May Deepen China's Supply-Demand Imbalance

Huang Yiping, a professor at Peking University, stated at an economic forum that the widespread deployment of artificial intelligence could exacerbate China's imbalance of strong supply and weak demand. He pointed out that as AI innovation accelerates, the contradiction of strong supply and weak demand is unlikely to disappear in the short term and may persist for some time. Huang suggested that China further advance market-oriented reforms to enhance the role of the market in resource allocation and increase the proportion of residents' income in the economy. He also mentioned the need to deepen overseas investment and industrial cooperation, rather than relying solely on exports. Additionally, Huang recommended that the central government increase borrowing to repair the balance sheets of local governments, financial institutions, and enterprises, emphasizing that if the economic activity capacity of these entities is not restored, the effects of stimulus policies will be limited.

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