China's K-shaped economy: world-class tech on top, weak jobs and demand below, James Crabtree finds (opens the source in a new tab)
- After two weeks in China, Crabtree sees a widening K: Shenzhen's EVs, AI and drones on top; falling investment, a property slump and weak private spending below, despite reported 4.5% growth.
- Economist David Daokui Li puts real unemployment at 10.2% against an official rate a little over 5%; the FT counts 53m people in food delivery and ride-hailing. Michael Pettis sees a Japan-style slow decade as the optimistic case.
- Brutal domestic price wars push Chinese firms abroad, and Beijing has new rules to monitor tech exports, covering AI, including open-weight models.
- 10.2%
- real jobless rate (Li); official ~5%
- 53m
- in delivery and ride-hailing (FT)
Why it matters Weak demand at home plus ferociously competitive firms means more cheap Chinese EVs, solar and electronics heading for markets like India. New Chinese controls on AI exports could also affect the open-weight models many startups build on.
Other side Crabtree calls these quick reflections from one trip, and estimates of real unemployment vary widely. China's strength in physical AI and manufacturing may matter more to the world than its slump at home.