Democrat triumph offers China ‘window to catch up’ on AI

{"text":[[{"start":6.238,"text":"China has a “rare window” to become the dominant AI superpower, analysts say, if the Democrats’ midterm election win slows US development of infrastructure crucial to the strategic technology."}],[{"start":17.178,"text":"Economic and technological rivalry between Washington and Beijing has intensified since the beginning of US President Donald Trump’s second term, and analysts say Chinese policymakers are weighing the impact of Democrats’ capture of both chambers of Congress on the global trading relationship."}],[{"start":34.235,"text":"Global markets have been roiled by the election fallout, in anticipation that the brakes could be put on the US’s multitrillion-dollar investment boom in AI data centres. This could also damp demand for Chinese electronics exports, an important source of economic growth amid weak domestic demand."}],[{"start":52.32,"text":"China’s benchmark CSI 300 stock index edged up 0.2 per cent on Monday after falling 1.4 per cent on Friday as concerns spread in Asian markets that the Democrats will take a tougher line on the AI sector."}],[{"start":66.087,"text":"But any AI slowdown in the US could give China’s sector “a rare window to catch up”, said Meng Qingyi, a researcher in global governance at Tsinghua University in Beijing and former consultant to tech group Huawei’s Institute of Strategic Research."}],[{"start":81.92,"text":"“China might want to seize this opportunity to speed up the making of domestic advanced chips and computing clusters, improve algorithms to build more powerful models with limited computing resources, and expand the global reach of its cheaper, easier-to-deploy open-source models,” Meng said."}],[{"start":98.357,"text":"Meng cautioned that such a window might not stay open long, saying Democrats and Republicans only differed over how AI should be developed and regulated rather than whether the industry should continue to expand."}],[{"start":110.48,"text":"“China will see any slowdown in the US as an opportunity to catch up in the AI race,” said Gary Ng, a senior economist at Natixis. “Despite the weaker chip production, China has an abundant electricity supply, a developed industrial ecosystem and less resistance in building data centres. It will try to beef up its advantages."}],[{"start":131.015,"text":"“A lame duck US presidency alone does not mean China can necessarily overtake,” he added. “The US is just slowing down the pace, and the hyperscalers can move part of the investment outside of the country.”"}],[{"start":142.16,"text":"Analysts said that a Democrat-controlled Congress could, however, introduce tougher restrictions on Chinese access to US technology."}],[{"start":null,"text":"

"}],[{"start":149.381,"text":"“The Trump administration is expected to maintain trade and tariff agreements with China rather than risk the political costs of reversing them,” said Zhang Jun, chief economist at Galaxy Securities. “However, tensions between the two countries could intensify over AI, advanced technology, manufacturing and supply chain security.”"}],[{"start":168.56,"text":"Democrats tend to favour tighter restrictions on China’s access to advanced US AI technology and talent, while the Trump administration has taken a more transactional approach and has at times eased controls."}],[{"start":181.288,"text":"Tighter restrictions could make it harder for Chinese technology giants such as ByteDance, Alibaba or Tencent to expand overseas data centres, which have become an important way for them to access advanced AI chips that are difficult to obtain in China."}],[{"start":null,"text":""}],[{"start":196.175,"text":"“The Democrats’ approach to China on technology is very different from Trump’s and might ultimately do more damage to China’s AI ecosystem,” said Dan Wang of Eurasia Group."}],[{"start":205.6,"text":"Frederic Neumann, chief Asia economist at HSBC, said any slowdown in American AI investment would create a “headwind” for exports from China and other Asian countries, which were “highly dependent” on demand from US data centre construction."}],[{"start":220.32,"text":"“One slight silver lining for Asia, maybe not so much for China, but for Asia in general, is that, if US data centre building gets delayed, it does open capacity and improve affordability for data centre build-outs elsewhere in the world,” Neumann said. “Presumably some of the prices will adjust downward for some of components.”"}],[{"start":237.84,"text":"A general fall in costs of data centre components could also help China speed ahead with its domestic construction."}],[{"start":244.606,"text":"“No one believes the AI industry boom is over yet. The technology has shown enormous potential and will continue to grow,” a senior researcher at a Shanghai-based government think-tank told the FT. “But the capital boom surrounding AI has largely run its course.”"}],[{"start":259.12,"text":"The researcher added: “Competition in the AI industry is fierce, and the battle for AI capital is equally fierce, even brutal. We seem to be entering that phase now.”"}],[{"start":268.48,"text":"China’s official response to the US midterms has so far been measured. Guo Jiakun, a foreign ministry spokesperson, told reporters on Thursday the elections were “a domestic affair of the US”, adding that Beijing remained willing to “build a constructive and strategically stable China-US relationship”."}],[{"start":292.67,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1794207257_2704.mp3"}