staff writer @TheEconomist. prev in China
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Joined June 2013
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Corbin Duncan retweeted
China releases Q3 GDP tonight. In nominal terms, AI is a big part of China’s export boom. Chips and computers account for more than 40% of the recent export increase. But on a net basis, AI trade is weighing on China’s trade surplus. The surplus growth comes from vehicles and other machinery.
The chip export boom is also mostly about prices. In September, China’s chip exports rose 136% in value from a year earlier, but the number of chips rose only 1%. Most of that is memory chips, where the global shortage has driven up prices. So AI trade isn’t adding much to real export growth. If net exports boosted real GDP growth in Q3, it wasn’t because of AI.
This month China's government released new guidelines for its innovation policy. They include this line:
"Construct a technology monitoring, risk warning, and emergency response system to ensure that artificial intelligence is safe, reliable, and controllable."
nda.gov.cn/sjj/swdt/xwfb/100…
An AI bust would be pretty bad for China’s economy. Data-centre inputs are probably ~40% of ytd export growth, and of course the second order effects of a generalised slowdown in foreign consumption would hit exports further
Chinese firms have emerged as the biggest losers of the faltering global AI trade, a setback for Beijing’s efforts to use stock markets to supercharge its ambition of technological supremacy bloomberg.com/news/articles/…
Corbin Duncan retweeted
My initial reaction to China's new AI export controls:
They're confusing because they seem to be creating restrictions for China AI exports while simultaneously signaling continued "automatic" approval for open-source models.
I don't think it's about leverage. I think China is generally worried about cyberattack potential for Chinese AI systems and don't want these proliferating outside China and then potentially hitting Chinese critical infrastructure or government systems.
So the toughest restrictions--the prohibitions 禁止出口--are on AI autonomous malicious code generation. But there are also broad restrictions 限制出口 on AI models of above certain performance thresholds. Ministry of Commerce later said open-source models would be "automatically" approved upon registration, but then it does lay the groundwork for a more systematic monitoring of models and possible real restrictions later on.
The part that's confusing to me is that AI systems that can help produce malware basically include all the top Chinese open-source models. And yet they're simultaneously "automatically" approved?
It seems like this set of new export controls were created by one part of the bureaucracy that's worried about proliferation of harmful AI capabilities but then another part is trying to say "but actually we still support open-source."
This is at least my initial reaction--my views may change as I re-read and re-analyze.
Distillation campaigns being responsible for 5-7% of Anthropic's revenue is mad. Revealed preference would suggest that distillation is q important for Chinese progress ft.com/content/11632d03-358c…
Beijing implemented its rare-earth controls on paper before Trump took office. It may not exercise these powers right away, but it’s giving itself the tools to close off its frontier models. Probably because it thinks it will need to use them at some point
Beijing just took a big step towards closing the Chinese frontier. The rules could give China's government the power to restrict AI developers from releasing their most advanced open-weight models.
It proposes banning exports of AI technologies that autonomously generate and modify malicious code. It also wants to restrict exports of AI-assisted vulnerability-discovery technologies. Giving a model away for free, ie open-weight, could qualify as an export.
Crucially, the rules distinguish between technologies already in the public domain and those not yet released. It specifically exempts existing open-source models. But new releases could potentially trigger export controls.
Providing foreign customers with access to models through APIs (ie, closed models) is generally exempt, whereas restricted models being served overseas could require a licence.
Beijing promises essentially automatic licensing for open-source releases, allowing developers to publish almost immediately after notification. But it's unclear whether this applies to those capabilities proposed for outright export prohibition.
If intelligence generalises, how can China's AI labs distinguish between a smart model and one that has the capabilities proposes for restrictions?
mofcom.gov.cn/zwgk/zcjd/art/…
Implications:
Investors worried about cheap Chinese models hurting returns from AI capex. Might be less of a concern
AI safety advocates might applaud controls on cyber-capable models
Many middle powers have been betting that Chinese open-weight gives them an outside option to American AI. Probably not now
A lot of CN messaging has focussed on open-weight being a gift to the world. Already we were seeing a nuancing of this language (see below), expect much more so now
More striking if subtle shifts on open source AI in the Chinese discourse—
The prominent scholar Zheng Yongnian (previously a pretty full-throated advocate of open source) now says:
"We cannot simply say that closed models are good and open models bad, or vice versa. Openness and closedness are themselves relative concepts..."
"If we ignore these boundaries and insist on unrestricted openness, managing the risks becomes a major problem. Governments can use artificial intelligence, and so can non-governmental groups. Constructive forces can use it, and destructive forces can use it too. A balance needs to be found here."
h/t @JFarquhars92862 sinification.org/p/gung-ho-d…
Corbin Duncan retweeted
This is a good breakdown by @kristy_loke and important reporting by @Nectar_Gan & @luzdingyu.
Here's what I predicted back in April (and wrote up a couple of weeks ago for @AEIfdp)—it does look like this is actually happening:
Really important update from China's ministry of commerce and ministry of science and tech (h/t @Nectar_Gan), not because it signals that the government's honeymoon period with open weight AI is over, far from it. But because it further confirms that as China's working on building out a more robust AI risk management regime (sth discussed in this year's Five Year Plan, see photo below, & by Xi at the World of AI Conference), it is singling out high-risk open models for more scrutiny. It appears that if the risks/ capabilities demand, a filing regime or prohibition may be considered, but this will be narrowly enforced and affect only a small number of products & services.
So, what hasn't changed: Open model releases at home and abroad remain a welcomed development by the government.
What has been clarified: On the open weight AI front, expect China to step up capability/risk-based governance to meet domestic needs, global demands.
Here are the relevant discussions and sentences (I'll let X's translate function do its job):
1. 此次修订亦是技术贸易管理的**常态化⼯作**，依法依规进⾏，不针对任何特定国家、地区或实体。
2. 近年来，⼈⼯智能、⽣物医药和光伏相关技术在敏感领域的应⽤不断拓展，各主要经济体均实施了不同程度的出⼝管控。
3. 中国参考国际通⾏做法，依法实施必要的管理，既**防范技术失控和不当扩散⻛险，也保障正常国际技术交流合作**，推动科技向上向善、安全可控、造福⼈类。
4. 中国政府⼀贯⽀持企业依法依规开展互利共赢的跨国经营与国际技术合作，**有关政策⽴场没有改变**。
5. 此次拟将⼈⼯智能⼤模型、智能体、⼒集群、信息处理相关23项关键技术增列⾄《⽬录》，主要有以下考虑：... 此次拟列管的**⼈⼯智能⾃主驱动恶意代码⽣成与变异技术等，可被⽤于攻击国家关键信息基础设施、国防军⼯、核
⼼政务等敏感系统，或⽤于绕过国家安全防御体系**。
6. ⿎励开源开放、合作共享。... **为⽀持构建⼈⼯智能开源创新⽣态体系，对⼈⼯智能类技术开源、中国企业在境外⾃建⾃营算⼒中⼼、赴境外开展芯⽚流⽚制造、利⽤境外资源开展联合研发、参与国际标准制定等情形的技术出，适⽤⾃动许可等便利措施，基本实现“即报即出”** ；对已通过开源、发表学术论⽂等⽅式进⼊公共领域的相关技术，拟不纳⼊出⼝管理范围，为⼈⼯智能技术国际交流合作创造良好环。
7. 需要特别指出的是，中⽅主张在相互尊重、平等互利基础上，与各国开展⼈⼯智能对话合作，**共同应对⼈⼯智能技术扩散和失控⻛险**。
8. **有关措施正式实施后，绝⼤部分⼈⼯智能技术仍可以⾃由出⼝。** 对于纳⼊限制类的⼈⼯智能技术，开展海外本地化部署，属于技术出⼝管理范围；**如果部署在海外⾃有云等⻛险相对可控的情形下，可适⽤⾃动许可等便利措施。** 对于企业利⽤限制类⼤模型对外提供API调⽤、APP/⽹⻚交互、SaaS应⽤、本地端侧轻量化部署等情形，不属于⼤模型技术出⼝管理范围。
(highlights are mine)
Overall, this doc does not strike me as a trade bargaining chip as much as primarily an AI security play & secondarily a soft power play (i.e. responding to global concerns over risks from frontier open models). This development/ document also chimes with my predictions back in July xitter.cf/kristy_loke/status/207… & my observations last month: thewirechina.com/2026/09/29/….
Under the proposed rules, "export" of a Chinese model that is in the top 10 globally will require a license
"at the time of export, public assessments by mainstream domestic or international evaluators or large industrial platforms rank the model in the global top 10 for such criteria as overall performance, specialised capabilities, global usage, safety performance or training efficiency."
*licensing promises to be straightforward for open-weights
Beijing just took a big step towards closing the Chinese frontier. The rules could give China's government the power to restrict AI developers from releasing their most advanced open-weight models.
It proposes banning exports of AI technologies that autonomously generate and modify malicious code. It also wants to restrict exports of AI-assisted vulnerability-discovery technologies. Giving a model away for free, ie open-weight, could qualify as an export.
Crucially, the rules distinguish between technologies already in the public domain and those not yet released. It specifically exempts existing open-source models. But new releases could potentially trigger export controls.
Providing foreign customers with access to models through APIs (ie, closed models) is generally exempt, whereas restricted models being served overseas could require a licence.
Beijing promises essentially automatic licensing for open-source releases, allowing developers to publish almost immediately after notification. But it's unclear whether this applies to those capabilities proposed for outright export prohibition.
If intelligence generalises, how can China's AI labs distinguish between a smart model and one that has the capabilities proposes for restrictions?
mofcom.gov.cn/zwgk/zcjd/art/…
Beijing just took a big step towards closing the Chinese frontier. The rules could give China's government the power to restrict AI developers from releasing their most advanced open-weight models.
It proposes banning exports of AI technologies that autonomously generate and modify malicious code. It also wants to restrict exports of AI-assisted vulnerability-discovery technologies. Giving a model away for free, ie open-weight, could qualify as an export.
Crucially, the rules distinguish between technologies already in the public domain and those not yet released. It specifically exempts existing open-source models. But new releases could potentially trigger export controls.
Providing foreign customers with access to models through APIs (ie, closed models) is generally exempt, whereas restricted models being served overseas could require a licence.
Beijing promises essentially automatic licensing for open-source releases, allowing developers to publish almost immediately after notification. But it's unclear whether this applies to those capabilities proposed for outright export prohibition.
If intelligence generalises, how can China's AI labs distinguish between a smart model and one that has the capabilities proposes for restrictions?
mofcom.gov.cn/zwgk/zcjd/art/…
Corbin Duncan retweeted
As the US and China battle for AI dominance, where do middle powers fit in? Join our expert panel with YCW London to discuss innovation, security, and strategic autonomy in the age of AI.
Register Now: henryjacksonsociety.org/even…
@JohnHemmings2 @KaylaBlomquist3 @kuhhbin @samolsenx
Corbin Duncan retweeted
If the Firmus IPO exposed anything it was that there was no new money left to buy. Literally all insiders wanted to sell.
Not saying this is the end of the bubble but this is always how bubbles end - the market realizes there is no incremental buyer…
This is actually a super interesting chart! I expected employment in China would be naturally shrinking because of its ageing population
So to work out how much of the decline in employment is a secular shift versus an economic story, I had Claude decompose changes in employment
Surprisingly (for me!) China's working-age population (15-64) actually swung back into growth in 2024/25
It seems to be an echo of the Great Famine of 1959-1961, which means the cohort of 15 year-olds entering the labour force will briefly outrun those turning 65
Corbin Duncan retweeted
I spent ages this morning doing my sums on China's September's trade data but kept having to redo them because I thought - surely they can't be right?
China's trade surplus with Germany grew 201.7% in Sept alone (vs Sept 2025)
With EU up 52.3%
With France up 251.8%
Crazy!
Corbin Duncan retweeted
Still cannot get around the fact that among all job posts mentioning AI in China, chatgpt is the most frequently mentioned model.
Until I see this job post about campus security guard, despite only requiring high school diploma, asking candidates to master ChatGPT's application in work.
Chris Wood cites token prices for Chinese models and OpenRouter usage data to predict "massive capital destruction". Big claim based on some weak, narrative-driven analysis
- there are many US models on the pareto frontier, with large gross margins
- OpenRouter data captures a truly tiny slice of proprietary model usage
- there is a tonne of uncertainty about how AI develops: how long will Chinese models remain open for? RSI, if it ever arrives, could mean anything less than the frontier is not worth having
The most likely long-term outcome of the AI boom will be massive capital destruction in the US, with market share going to cheaper open-source Chinese models, according to Jefferies. bloomberg.com/news/articles/…
