Investor's week in Beijing and Shanghai: China's AI is the only engine still running
Afinetheorem · x · 2026-09-22
Investor David Cheng published a long-form write-up of a week in Beijing and Shanghai meeting major Chinese model labs, researchers, VCs and founders. Key observations:
- Macro backdrop: lightest Beijing traffic he's seen in a decade, many young graduates driving Didi, youth unemployment at 17.9% (July), retail sales up only 0.6% YoY vs 1.5% expected, real estate still dragging consumption.
- Real state of Chinese AI: practitioners see it as the sector the state decided must succeed—subsidized electricity, fast-tracked IPOs, encouraged price wars with little regard for survivors. The author argues it's less a story of strength and more the only working engine of the Chinese economy.
- Shared consensus (echoed by Afinetheorem): China's energy advantage vs US chip advantage, brutal involution among labs, tiny domestic off-prem SaaS market, and the Manus situation chilling funding.
- The essay title, "Involution Without Export Is Wasted Effort," questions whether domestic price wars can translate into global competitiveness.
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