Chinese President Xi Jinping has publicly questioned the country’s rapid and widespread investment in artificial intelligence (AI), computing power, and new energy vehicles (NEVs). Speaking at a major political meeting in Beijing, Xi voiced concerns that the ongoing tech investment race across China’s provinces could be excessive and potentially unsustainable, especially as the nation grapples with economic challenges, including growing fears of deflation.
His remarks, reported by the Financial Times, were delivered at the two-day Central Urban Work Conference in the capital and featured prominently on the front page of People’s Daily, the official newspaper of the Communist Party.
Xi urges caution in tech development
During his address, Xi questioned whether all provinces needed to jump into the same industries, suggesting a more cautious and regionally tailored approach. “When it comes to projects, there are a few things — artificial intelligence, computing power, and new energy vehicles,” he said. “Do all provinces in the country have to develop industries in these directions?”
He went on to criticise local officials for prioritising short-term growth without considering long-term consequences. “We should not only focus on how much GDP has grown and how many major projects have been built, but also on how much debt is owed,” Xi stated. “We should not let some people pass the buck and leave problems to future generations.”
Xi’s comments reflect a broader concern about the risks of overcapacity and inefficient allocation of resources in emerging technology sectors. While these industries are central to China’s ambition to remain globally competitive, unchecked expansion could pose significant economic and financial risks in the future.
No major policy shift announced
Despite the President’s warning, there has been no official indication that China plans to reduce its emphasis on AI and electric vehicles. In fact, recent developments suggest the country is continuing to expand its presence in both sectors.
Earlier this week, US chipmaker NVIDIA was granted permission by the US government to resume exports of its artificial intelligence chips to China. The company, which had previously been blocked from selling its H20 AI GPU due to concerns over military use, is reportedly holding around US$8 billion in pending orders. The move signals that despite geopolitical tensions, trade in advanced technology between the two nations remains active, albeit under strict oversight.
China’s leadership in the global electric vehicle market also shows no signs of slowing down. The country not only dominates EV production but is also becoming increasingly competitive in autonomous vehicle technology. In a significant development this week, Uber announced a partnership with Chinese tech giant Baidu to integrate thousands of Apollo Go self-driving cars into its platform. These autonomous vehicles will be rolled out across mainland China and in selected international markets outside the United States.
Balancing growth and sustainability
Xi’s comments highlight the tension between China’s push for innovation-driven growth and the need for financial prudence. His call for balanced development suggests the government may start to scrutinise regional investment plans more closely, especially when they involve sectors that are already attracting heavy national focus.
By drawing attention to potential debt risks and inefficient duplication of efforts across provinces, Xi is urging officials to pursue high-quality growth rather than merely focusing on sheer scale. The message arrives at a critical juncture for China’s economy, as it navigates a post-pandemic recovery, slowing domestic demand, and ongoing pressure from trade disputes with the United States.
