AI is not enough to arrest China’s decline

FOR all the worry about how America has become one big bet on artificial intelligence, a similar but perhaps more alarming story is unfolding quietly in the other economic superpower. China’s vaunted AI prowess is concealing deep rot elsewhere in its economy.

Though many forecasters keep expecting China to surpass the US as the world’s leading economy, its growth peaked in 2021. Since then, China’s share of global gross domestic product has fallen in nominal terms from 18 to 16.5 per cent, while the US share has risen to 26 per cent.

China’s growth rate has dropped below the rest of the world, including the US. In real terms, independent estimates now put China’s growth in real terms closer to zero than to the official target of 4.5 to 5 per cent.