Summary of Key Points from the Conference Call Industry Overview - **Industry**: AI-driven new economy in China - **Context**: The new economy is rapidly catching up with global standards, particularly in technology sectors, leading to a tech-heavy equity rally in the market [1][4][7]. Core Insights and Arguments - **Economic Impact**: The new economy's growth is now macro-relevant, potentially offsetting the negative impact of the property sector on GDP [1][4][34]. - **Job Displacement Risk**: Approximately 31% of jobs in China are highly exposed to AI, with 9.6% (around 70 million jobs) facing direct displacement risk and 21.4% experiencing productivity augmentation but increased competition [1][5][62]. - **Sector Vulnerability**: The services sector and young workers are particularly vulnerable to AI disruptions, with youth unemployment at 16.5% as of the end of 2025 [5][64][70]. - **Policy Recommendations**: There is a need for policies that prioritize augmentation over substitution to avoid the "Turing Trap," which could exacerbate inequality and job loss [6][82]. Additional Important Insights - **Consumer Sentiment**: Despite positive macroeconomic indicators, consumer confidence remains low, indicating a disconnect between macro growth and micro sentiment [39][40]. - **Investment in AI**: AI capital expenditure (capex) is estimated to reach approximately RMB 3.3 trillion from 2025 to 2030, highlighting the significant investment in this sector [34][35]. - **Technological Advancements**: China's performance in large language models (LLMs) is improving, narrowing the gap with the US, and the country is becoming a leader in AI talent and patent production [15][22][23]. - **Work-Life Balance**: Improving work-life balance is seen as essential for translating AI productivity gains into increased domestic consumption [82][87]. Conclusion The AI-driven new economy in China presents both significant opportunities and risks. While it has the potential to drive macroeconomic growth and technological advancement, it also poses challenges in terms of job displacement and consumer sentiment. Policymakers are urged to focus on strategies that enhance job augmentation and ensure equitable distribution of AI's benefits.