As China celebrates the Year of the Snake, the first lai see (red packet) was the revelation of DeepSeek’s artificial intelligence (AI) software, which led investors to question US tech valuations, causing a near-US$1 trillion Wall Street rout.
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Widening volatility looms, with US President Donald Trump signing a flurry of executive orders, amid huge uncertainty from natural disasters and, of course, emerging tech game changers like DeepSeek. It made me think of the classic game of chance, Snakes and Ladders, where one could be advancing up a ladder one moment and sliding down a snake the next.
How do we figure out who and what is up and down in this snaky, slippery year? The best analysis I have heard is from Hong Kong-based economist Louis-Vincent Gave, who argues that mainstream media has overlooked the fact that the Chinese economy has leapfrogged the West in engineering and, increasingly, technology.
After eight visits to the mainland last year, I arrived at the same conclusion – most of us have overlooked the qualitative change in the mainland economy because few outside “experts” have visited the factories and looked at what is really going on.
The macroeconomic statistics outsiders examine suggest a Chinese economy in deep trouble but what we are witnessing is a qualitative change in supply (production) and demand (consumption or investment). A structural and cyclical change has happened in China while the world was distracted by the Ukraine and Gaza wars, and domestic political turmoil in the West.
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Chinese AI disrupter DeepSeek claims top spot in US App Store, dethroning ChatGPT
Chinese AI disrupter DeepSeek claims top spot in US App Store, dethroning ChatGPT
We need to see these nuanced changes in the context of a world being transformed by technology (especially social media) and the discrediting of mainstream Western media churned out by liberal elites who have lost touch with reality and the masses. Wall Street reads the economic tea leaves that show a booming US economy, but underplays the fact that the boom in stock markets and employment was stimulated by unsustainable fiscal and trade deficits.