As China’s economy lumbers amid property crisis, why hasn’t AI helped pick up the slack?
An economist says AI is boosting the US much more than China, where property weakness and chip supply limits keep it from filling the growth gap.
Intelligence analysis by GPT-5.4 Mini
Nomura’s Lu Ting argues that AI is reshaping the US economy far more than China’s. In China, AI investment is still too small, property once mattered much more, and access to chips and capital limits the upside.
AI is like a new engine for the economy, but in China that engine is still too small and blocked by missing parts. The article says the US can rev its engine faster, while China’s old engine, property, is still broken.
Analysis
What the economist argues
Lu Ting, chief China economist at Nomura, says AI is not acting as a broad economic rescue for China the way it is for the US. He argues that the technology’s effects in China are still limited and may even deepen the gap between stronger parts of the economy and weaker ones.
Why China looks different
The article says AI is already having a large effect on the US economy, with investment in the sector running far ahead of consumer spending. By contrast, China’s annual AI investment is described as exceeding one trillion yuan, but that is still far below the scale of property investment seen during the 2010s. Lu also says AI’s share of China’s economy is only about one-third of the US level.
Structural constraints
The piece points to two practical limits. First, China does not have the same depth of capital markets as the US, making large fundraising rounds harder. Second, chip access remains a bottleneck because other countries may not sell the hardware China wants to buy in bulk. That means AI spending cannot scale as easily.
Bigger picture
The article’s core point is not that AI is irrelevant in China, but that it is unlikely to replace property as a short-term growth engine. Instead, its benefits may be real but uneven, with fewer spillovers to the wider economy than in the US.
Key points
- Lu Ting of Nomura says AI is boosting the US economy much more than China’s.
- China’s annual AI investment is said to exceed one trillion yuan, but it is still smaller than past property investment.
- China’s AI investment share in the economy is about one-third of the US level, according to Lu.
- Capital markets and chip access are key limits on how fast Chinese AI can scale.
- The article argues AI is unlikely to offset China’s property crisis on its own.
If China can expand AI investment and ease the hardware bottlenecks, the technology could still become a meaningful new source of growth. The article suggests AI is already a major force in the US, so a stronger Chinese AI ecosystem could help narrow the gap over time.
The downside is that AI may stay too small to replace the lost momentum from China’s property sector. If chip access and financing remain constrained, AI could deepen the split between parts of the economy that can invest and those that cannot.
