Xi Jinping Reconsiders China's Uniform Push Into AI and Electric Vehicles
📷 Image source: i.insider.com
Chinese President Xi Jinping has raised concerns about the country's aggressive, homogenous pursuit of dominance in artificial intelligence (AI) and electric vehicles (EVs), signaling a potential shift in industrial strategy. During a high-level economic meeting, Xi questioned whether every Chinese province and company should be funneling resources into the same high-tech sectors, warning of 'industry involution'—a term describing excessive competition that erodes profitability without fostering innovation.
China's rapid expansion in EVs and AI has led to a price war, with domestic manufacturers undercutting each other amid slowing global demand. Analysts suggest this hyper-competition risks creating a bubble, particularly as deflationary pressures mount. The government now appears to be advocating for a more diversified economic approach, encouraging regions to leverage their unique strengths rather than blindly following national tech mandates.
Additional reporting from the South China Morning Post highlights that Beijing is also wary of overcapacity in these industries, which could trigger trade tensions as Chinese firms flood international markets with subsidized products. Meanwhile, experts cite the need for sustainable growth models that prioritize quality over sheer volume. This recalibration could redefine China's economic playbook ahead of its 2025 development goals.
