There was a development in July that received surprisingly little attention from investors: for the first time in ten years, the Chinese government convened a Central Urban Work Conference. At the time, the state-run People’s Daily published an unusually blunt criticism by President Xi Jinping: “When it comes to launching new projects, the conversation always circles back to the same few areas—artificial intelligence, computing power, and new-energy vehicles. Must every province in the country pursue industrial development in these exact directions?” Domestic and international media were stunned, as it is extremely rare for China’s official press to reproduce Xi’s remarks verbatim without softening the language. This alone signaled Xi’s displeasure with local governments’ “herd mentality” in rushing to invest in AI and similar projects.
