China’s rapid progress in artificial intelligence contrasts sharply with its struggling economy, which faces deflation, falling car and housing sales, and youth unemployment at 18.9 percent. As Xi Jinping visits the U.S., AI achievements are highlighted, but economists warn that overinvestment in tech neglects broader economic needs. Li Daokui, Liu Shijin, and Huang Haizhou—former central bank advisers—have called for stimulus, including raising rural pensions from $30 to $150 monthly, to boost demand and combat deflation.

They argue that technological innovation cannot thrive in a deflationary spiral. Despite their warnings, the Politburo maintained incremental stimulus and vowed to build an 'intelligent new economy.' State media did not announce specific targets after the July 30 meeting. Stanford’s AI Index estimates $184 billion in state AI investment from 2000–2023, with plans to spend $295 billion over five years on data centers operated by state-owned firms.