China poised for 100+ Deepseek-level breakthroughs, says ex-PBOC official

China is on the verge of unleashing more than 100 artificial intelligence breakthroughs similar to DeepSeek within the next 18 months, according to Zhu Min, former deputy governor of the People’s Bank of China.

Speaking yesterday at the World Economic Forum in Tianjin, Zhu said the country’s unique advantages are accelerating the development of transformative technologies that could reshape its entire economic landscape.

“These new software products will fundamentally change the nature and the tech nature of the whole Chinese economy,” Zhu told the forum, as quoted by Bloomberg.

Zhu, who also served as deputy managing director at the International Monetary Fund, highlighted China’s vast engineering talent, expansive consumer market, and proactive government support as driving forces behind this AI surge.

His remarks reflect growing optimism about China’s prospects in the global race for AI dominance – particularly as tensions remain high between Washington and Beijing.

The United States continues to block Chinese firms from acquiring advanced semiconductor equipment and Nvidia Corp.’s top-tier AI chips, citing national security concerns. As a result, Bloomberg notes, China is now relying heavily on domestic tech champions like Huawei Technologies Co. to advance its chipmaking capabilities.

The unexpected success of DeepSeek, a powerful and low-cost AI model launched in January, stunned the global tech community and sent Chinese tech stocks soaring. “DeepSeek’s emergence triggered a rally,” Bloomberg reported, “fueling optimism over Chinese competitiveness despite trade friction with the Trump administration and domestic economic headwinds.”

According to Bloomberg Economics, the contribution of high-tech industries to China’s GDP rose to approximately 15% in 2024 – up from 14% the previous year – and is projected to exceed 18% by 2026.

The World Economic Forum’s annual “Summer Davos” meeting in Tianjin has drawn global business leaders and policymakers. Chinese Premier Li Qiang is set to deliver opening remarks today, with Singaporean Prime Minister Lawrence Wong and Vietnamese Prime Minister Pham Minh Chinh among other speakers.

Despite a tariff ceasefire agreed with the U.S. last month, elevated duties remain in place and a lasting trade agreement is uncertain. Bloomberg economists forecast China’s GDP will grow by just 4.5% in 2025 – below the official 5% target – after a 5.4% expansion in the first quarter.

“The uncertainty brought by U.S. tariff policy is an important factor that may lead to negative growth in global trade this year,” Zhu warned reporters on the forum sidelines. “The entire trade industrial chain has begun to slow, investment has begun to stop — so the impact is greater than the actual tariff rate.”

Zhu also predicted U.S. inflation would begin to rise again in August, as pre-tariff inventories dwindle and higher costs ripple through the economy.

Despite global volatility, Huang Yiping – a member of China’s central bank monetary policy committee – said GDP growth likely surpassed 5% in the second quarter. Speaking at the same forum, Huang pointed to robust economic data in April and May, along with early positive indicators in June.

Still, he emphasized domestic demand remains weak: “Boosting consumption is still a big challenge, partly because the global external market is less open as before,” Huang said. “That’s why I think the policy priority now is to first focus on domestic circulation.” Staff Reporter