China's disappointing recent economic data masks a deeper shift towards an economy built on artificial intelligence, according to Yanliang Miao, chief economist at investment bank CICC.
Speaking on "Bloomberg: The China Show", Miao reframed the slowdown as a structural transition rather than a stumble, with AI and the green transition emerging as the new engines of growth.
The standout figure is in trade.
AI accounted for 45% of China's export growth in the first eight months of the year, Miao said.
That impact is now moving from exports towards domestic investment.
Three advantages
The case for China's lead rests on three strengths.
The first is widespread adoption of AI across real-world uses, the second is cheap open-source models, and the third is heavy infrastructure backed by ample energy capacity.
Miao likened chips and electricity to the coal and power that drove earlier industrial revolutions, casting them as the essential inputs of the new one.
Large platform companies are pouring capital into that buildout, funded through both equity and loan markets.
Much of the spend goes on data centres, cooling systems and energy, tying financial markets more tightly to physical investment.
The changes are already reshaping daily life and consumer behaviour, he said, even if they do not yet show up clearly in GDP figures.
The jobs question
The labour effects are more mixed.
AI is reshaping individual tasks, but there has been no significant job displacement at the aggregate level so far.
Some roles are more exposed than others.
Coding, accounting and junior legal positions are easier to automate, creating difficulties for people entering the workforce.
Senior professionals look safe for now, though the longer-term effect on job creation remains hard to predict.
Currency and stimulus
Miao, a former official at China's State Administration of Foreign Exchange, also pushed back on calls for the renminbi to appreciate sharply.
Faster productivity growth in non-tradable services such as healthcare and education pushes prices down, he argued, holding the equilibrium exchange rate lower and acting as a ceiling on the currency, which trades at around 6.7 to the dollar.
The near-term growth picture, meanwhile, depends on state spending that has run behind schedule.
To hit its growth target of 4.25% to 4.75%, Beijing needs to deliver the stimulus it promised earlier in the year.
Around 5 trillion yuan of new bonds is due in the final three and a half months, worth roughly 1.1% of GDP, catching up with the transformation AI is already driving underneath.
