China has made major advances in AI under Xi Jinping. Its economy is in its worst shape in decades. Economists warn the government is over-investing in AI. AI creates relatively few jobs. Youth unemployment reached 18.9% in August. Domestic car sales fell 20% in the first half of 2026. Housing sales fell 14% in the same period. The country faces a deflationary spiral. Li Daokui said the economy is running too cold. Liu Shijin proposed raising rural pensions to $150 per month. High-tech sectors cannot lift the broader economy.

• 18.9% youth unemployment in August
• 20% drop in domestic car sales in H1 2026
• 14% drop in housing sales in H1 2026
• $30 to $150 proposed rural pension increase