China central bank adviser says AI could deepen supply-demand imbalance - Reuters

A senior adviser to China's central bank has cautioned that the rapid adoption of artificial intelligence could worsen imbalances between supply and demand in the economy, according to Reuters. The remarks add a note of caution to the prevailing narrative that AI will mainly lift productivity and growth.

The concern is rooted in how AI affects both sides of the economy at once. If automation expands output capacity faster than wages and consumer demand grow, the result can be excess production, price pressure and displaced workers. That matters for markets because central banks weigh such structural shifts when setting interest rates, and because AI-linked investment has become a major driver of equity valuations.

For observers, the key question is whether policymakers treat AI as a productivity story or a demand problem. Watch for further commentary from Chinese officials, any shift in industrial or employment policy, and how global central banks frame AI in their own outlooks. The debate is still early, and it is likely to shape expectations well beyond China.