花旗-中国经济：AI驱动的新经济中宏观与微观的脱节-The Macro-Micro Disconnect of AI-Driven New Economy-20260203

Viewpoint|China’sAI-drivenneweconomyiscatchingupwiththeglobalfrontier,fuelingatech-heavyequityrally.ForGDPaccounting,theneweconomyisnowmacro-relevantandmayfullyoffsetproperty’sdrag.Thepromisingmacrostory,however,hasfailedtoliftmicrosentiment.AImayraisetheriskof“joblessgrowth”,deepeningthemacro-microdisconnect.Ourestimates–conservativerelativetotheIMF’s–suggestAIcouldimpact31%ofjobsinChina,with9.6%(c.70mnjobs)facingdirectdisplacementriskand21.4%seeingproductivityaugmentationbutalsomorecompetition.Theservicesneedtoprioritizeaugmentationoversubstitution,strengthenthesocialsafetynet,andensureequitableredistributionofAI’sgains.Improvingwork-lifebalanceisakeychanneltotranslateAI’sproductivitygainsintodomesticconsumption.AIgovernanceisacritical,yetunderappreciated,factorforAIinvestmentsinChina.CitiResearchisadivisionofCitigroupGlobalMarketsInc.(the"Firm"),whichdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethattheFirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.Certainproducts(notinconsistentwiththeauthor'spublishedresearch)areavailableonlyonCiti'sportals.203February2026performancedeficitinLLMsagainsttheUSisnarrowing,especiallypostthe“DeepSeekmoment”.Andthegovernmentisdoublingdownonthepushforhardwareinnovation,particularlyinsemiconductorchips.Thishasfueledaheavilytech-drivenequitymarketrally.Fromamacroperspective,theneweconomy’sgrowthcontributionmaynowfullyoffsetthedragfromthepropertysector.Thepromisingmacrostory,however,hasfailedtoliftmicrosentiment.ofemploymenthashighexposuretoAIinChina,ofwhich,9.6%(c.70.3mnjobs)facesadirectriskofdisplacement,whiletheremaining21.4%mayseeproductivityaugmentationbutalsofeweravailablejobs.Theservicessectorandyoungpeopleareparticularlyexposed.Thispresentsahigher-levelchallenge,sector—atraditionalcushionforstagnantmanufacturingemployment—isnowalsounderpressurefromdisruptivetechnologies.Earlywarningsignsarebeginningtosurface.Thisalignswithtop-levelguidance,includingtheCEWC’sexplicitcallto“improveAIgovernance”andthe1developmentofhuman(人的全面发展)”.TheMoHRSSjustpledgedtoimpactonjobs(Xinhua,Jan27th).TonavigatetheAItransition,strengtheningthesocialsafetynetandlaborprotectionisnowmoreurgentthanever.Improvingwork-lifebalanceviafewerworkinghoursandmoreholidayscouldbeakeychanneltotranslateAI’sproductivitygainsintodomesticconsumption.followsthereleaseofDeepSeek-R1inJanuary2025wasatech-ledequityrallyintheHK/Chinamarkets(Figure1).Neweconomy-relatednames(Alibaba,Tencent,Xiaomi,SMIC,NetEase,KuaishouandBaidu)ledthemarketsforthemostof2025,mirroringtheUSmarket’sreactiontoChatGPT’slaunchinNovember2022(Figure2).Thisoutperformancewasunderpinnedbyfundamentals,asthesefirmsdeliveredsuperiorrevenueandprofitgrowthcomparedtotherestofthemarketamidalacklustermacroenvironment(Figure3andFJan-20-25=HongKongEquXiaomi,SMIC,NetEase,KuaishouandBaiduJan-20Mar-20May-20Jul-20——AI——Non-AIHangSen2v-30-22=AMZN,GOOGL,NVDAand03February202603February20263%%50Xiaomi,SMIC,NetEase,KuaishouandBaidu%5%50AIAI=AAPL,META,MSFT,AMZN,GOOGL,NVDAandAI,S&P500advantage,createscompetitiveinroads,asevidencedbyDeepSeek’sadoptioninAfrica(Bloomberg,Oct22nd,2025).Thehurdlefromhardwarecouldbelooseningaswell.WecalculatethatChina’sapparentself-sufficiencyratioforICshasrisento38.7%,from15.0%in2015,involumeterms,andtheprogressissimilarinUS$terms(Figure6).Withsustainedpolicysupportforthesemiconductorsector,furtherprogressappearslikelytous.Jan.2025,%50ApparentSufficiencyChina'sSelf.RatiofoApparentSufficiencymeasureof(interim)innovationoutcome,thecountryaccountedfor69.7%ofglobalAIpatentsvs.14.2%fortheUSin2023,layingastrongfoundationforfuturebreakthroughs(StanfordAIIndexReport,2025,Figure7).What’sbehindthat4developmentisthatChinahassurpassedtheUSasthetopproducerofAItalent,withChinese-bornresearchersmakingupnearlyhalfoftheworld’stop-tierAIcomplementedbyarobustindustrialecosystem,whichfacilitatesrapidAIadoption.MorethanhalfofallnewindustrialrobotinstallationsgloballynowhappeninChina(Figure9).Further,substantialinvestmentinenergyinfrastructureprovidesthenecessarypowerforfactorssuggestChinacouldbeapproachingtheinflectionpointoftheproductivityJ-curvefornewtechnology.14.2%fortheUSin20230%ShareinWorldGranted%kInstallationofIndu0AItalent%CountriesofOriginofTop.TierAIResearchers(BasedonUndergraduateDegrees)0KTWhGlobalPo86420sentiment,aswehavedocumentedinourearlierdiscussionoftheK-shapedeconomy(see:2026Outlook:MindtheGap).TheK-shapemayhavestartedtotakeformwithdomesticsupplystrongerthandomesticdemandduringCovid.TheAI-5drivenneweconomy,asanemergingdivergencein2025,couldfurtherunderpintheK-shapeandtheentrenchedmacro-microdisconnect,inourview.~RMB435bnlastyear,~0.3%/0.9ofGDP/FAI,andexpectittoaccumulateto~RMB3.3trnduring2025-30E(Figure11).WhilecapexisthemosttangiblechannelthroughwhichtheneweconomyexercisesitsGDPimpact,wealsoconsidersizingitrelativetothepropertysector:NarrowCoverage:Theprfromthepeakof8.3%in2020,whileITservices’hassteadilyrisento5.0%from<2%adecadeago.Ifweextrapolatetheirtrends,ITservices,onlyasubsetofBroadCoverage:Wecalculatethetotalcontributionofthepropertysector,includingallinput-outputlinkages,basedonourearliercalculationfor2020andextrapolatetheseriestorecentyearsusingpropertyinvestment(excludinglandpurchases).Thesectorcouldhaveshrunkto13.3%ofGDPin2025peakof28.7%in2013.Incontrast,the“threeneweconomies”constituted18.0%ofGDPin2024–thisNBSconceptcoversnewindustries,newformatsandnewbusinessmodels(NBS,Aug1st,2neweconomynowfullycounterbalancestheproperty’sdrag(Figure14).2025,~0.3%/0.9%ofGDP/FAIRMBbn02025.30ELeadingCompanies987654326——ThreeNewEconomies(NBS)pptContributiontoG54310-2.1.6ThreeNewEconomies(NBSstayedsubduedthroughout2025despitetheequityrally(Figure15).The~90readingdidn’timprovemuchfromtheCovidlows,stillfarbelowtheneutralbenchmarkof100.BalanceSheet:Thehousingdownturncontinuestodriveanegativewealtheffect.Fiveyearsintothedowncycle,propertystilltakesadominantshareinhouseholdassets,awealth.Thewealtheffectfromtheequitymarketisneithersignificantnorbroadenoughtooffsetthis.CashFlow:What’snewfromtheneweconomyistheadditionaljobheadwinds.Despiteresilientheadlinegrowthandexports,householdexpectationsonincomeandemploymenthaveturnedgrimmer,accordingtoaPBoCs(Figure16).ThistrendmaybeamplifiedbyrisingAIadoption,mirroringdevelopmentsintheUthroughout20254QMAPBoCHouseholdSurvey4Q——IncomeConfidenceJobSentiment,%ofGrim,Re7DespitesolidGDPgrowthmeetingthe~5%targetin2023-25,urbanemploymentappearstobepeakingout(Figure17).Jobdestructionistimewiththecreationof>10mnnewjobseachyear(12.7mnin2025).Wegaugejobdestructionbythegapbetweenthenetchangeinemploymentandgrossnewemploymentfigures,whichincludesnaturalreductions(自然减员,NBS,Feb28th,2025).Bythismeasure,cumulativejoblossesreached53.6mnover2014-24(Figure18).AndthepaceofthisdestructionappearstohaveacceleratedrecentlWiththeriseofjobmarketturnover,some200mnpeopleareengagedin“flexibleemployment”(Gov,May20th,2021),rangingfromfooddeliveryriderstoride-hailingdrivers,whichaccountfor~26%ofChina’slaborforimprovements.Averageweeklyworkhoursreached48.6asofend-2025–upfrom46.8in2019andwellabovethenormalworkhourstandardof44–makingChinaanoutlieramongglobalpeers(Figure20).Thistrendsuggestsintenselabormarketcompetition,likelydrivenbyastructuraldivergencewheretheneweconomyleadsgrowthbutfailstocreatesufficientjobs,ultimatelytranslatingintolongerhours.RMBtrnNomin0CumulativeJobDestructions(inclNatuCumulativeJobDestructions(inclNatu..1.5..1.5.1.0.....9.480~200mnGigEconomyhrs/weekAverageWorkHoursemploymentinChina.Thelossofagriculturaljobsamidurbanizationisnotasurprise.Employmentinlargeindustrialenterprises,however,hasalsofallenby22.9mnfromits2014peak,stagnatingat~77mnoEvenboomingsectorsarenothiringmanymoreworkers.Forremainedlargelyflatat~4.8mn.Sectorsfacingdemandstress,suchastextilesandsteel,haveunsurprisinglyexperienceddeeperjobcontractions(Figure22).ThissurprisingdeclineinmanufacturingjobscontrastssharplywithChina’srobustindustrialoutputandhistorictradesurplus.2001=100Industrial.23mnfrom2014IndustrialProduction——Employme8%64208%6420Auto●TelecomTextile'transitioningoutofagricultureandindustrylandjobsinservicessectors.Thislabor9reallocation,combinedwiththeriseoftechplatforms,createdtheworld’slargestgigeconomyinChina.However,withGenAI’spotentialtoautomate20-40%oftasksasourglobalteamnoted,thisvitalemploymentenginenowfacesacriticaltest.Iflarge-scaleAIadoptionweretoleadtomorejobsubstitutionthancreation,thefullforceoftech-drivenjobmarketpressureswouldbeexposed.whichanalyzesoccupationsbasedontheirexposureandcomplementaritytothetechnology.Wemapthe74occupationcategoriesfromChina’s2020populationcensusintoa2x2matrixalongthesetwodimensions(Figure23andFigure24).tasksandAI’scapabilities,drawingonrecenteconomicliteraturecoveringtheglobalmarket(ILO,May20th,Sep19th,2025).Forouranalysis,weutilizetheexposuregradientfdetailedbreakdownof427occupations,whichwethenaveragetoalignwiththeComplementarity:FollowingtheIMF’srelativejudgmentapproa14th,2024),weclassifyoccupationsashavinglowcomplementaritywithAIiftheirtasksare[1]routineandstructured(e.g.,clerks,financialservicesworkers),[2]dependentonphysicalactivities(e.g.,athletes,constructionworkers),or[3]requiresignificanthumaninteractionandjudgment(e.g.,accommodationservices).Basedonthesecriteria,weput50.9%ofsurveyedoccupationsintothelowcomplementaritygroup.OccupationsbyRelationshipwithAIfigurecomparedwiththeIMF’s40%globalassessment.Todivefurtherintothis,wefocusonoccupationswithhighexposure,distinguishingbetweensubstitutionandaugmentationbasedontheircomplementaritywiththetechnology(Figure25).SubstitutionRisk(Lcomplementarityfaceadirectriskofdisplacement.Intheseroles,suchasclerksandfinancialservicesworkers,AI’scapabilitiesheavilyoverlapwithjobtaskswithoutsignificantlyboostinghumanproductivity.Weestimatethisgroupaccountsfor9.6%ofemployment,covering70.3mnpeople.exposureandhighcomplementarityaremorelikelytobeaugmentedbyAI,leadingtosignificantproductivitygains.Thisgroup,includingresearchers,judicialworkers,andITprofessionals,facesindirectrisksfromintensifiedcompetitionandnarrowedpathsforcareeradvancementasproductivityimproves.Weestimateitaccountsfor21.4%ofemployment.andIT,whichhavebeenmajorsourcesofhigh-incomejobs,couldfacethemostsignificantdisruption(Figure26).Furthermore,youngworkers,withtheunemploymentratestillelevatedat16.5%asofend-2025(Figure27),couldbemorevulnerabletoAIrisksthanothers:weestimate13.6%ofthoseaged20-29areinjobsatdirectriskofdisplacementand26.4%faceindirectcompetitionrisk–significantlyhigherthanthe6.2%and15.5%respectiverisksfortheagegroupof50-59(Figure28).ThismirrorstrendsobservedintheUSlabormarket(Stanford,Nov13th,2025).TherapidevolutionofAIandthelackofgranularoccupationdatamaketheassessmentdifficult.Ouraccountofexposureandcomplementarityisalsoonarelativebasis,whichissettochangeasGenAIpenetratesInanycase,ourestimatethat~9.6%ofjobsfaceadirectdisplacementrisk,alongwiththe21.4%ofjobsfacingindirectpressure,isbroadlyconsistentwithacademicfindingsforEMs(IMF,2024),reinforcingitsvalueasaninitialassessment.%0JobsbyAIExpsoure/ComplementarityinCensusSampleIndirectRiskfromfromCompetitionDirectRiskofDisplacementFigure26.High-to-AverageAnnualWage,2024HigherAIExposureAgricultureRMBkNon-Private%SurveyedUnemploymentRateExcludingStudents8SurveyedUnemploymentRate——YouthUnemploymentRa5026.426.720~2930HighComplementarityLowacleartrendofshiftingtowardslow-AI-exposureroles,asdemonstratedbyPekingalsoledtoayouth“flighttosafety”.Thenumberofapplicantsforcivilservantpositionssurpassedthoseforgraduateschoolforthefirsttimein2025(Figure30).frommanufacturingbyautomation,asseeninthesurgeofride-hailingdriversto7.5mnbyOctober2024(Sina,Nov30th,2024,Figure32).Giventhenumberofcruisingtaxidriverswasalreadysignificantat2.7mnasofend-2023,thisgigeconomycouldbeclosetotheedge.Shouldtechnologieslikerobotaxiautomatetheseroles,thesamegroupofworkerswouldfaceasecondwaveoftech-drivendisplacement.AI-exposurejobs543210ApplicantsforCivilServants543210PrimarySecondaryTaxiandTaxiandRide.HailingDrivers8420Taxi(Estimate)investmentsinChina.Whilethemarketremainsfocusedoncommercialmetricslikecapex,energyusage,labor-costsavingsandproductivitygains,webelievepolicymakerswillincreasinglypayattentiontothesocio-economicconsequencesofAIdeployment.Justasregulatoryriskswereonceadefiningfactorforinternetplatforminvestment,AIgovernancewillneedtobeincorporatedintotheAIinvestmentframework.Emergingpolicyandsocialconstraintsareperhapsnolessimportantthantechnologicalcapabilities.The“AI+”strategyissettobeatoppriorityforthe15thFYP,drivenbythepu“newproductiveforces”amidtheUS-Chinatechrace.However,theTuringTrapcouldarisewhentechnologysolelyautomatesexistinghumantasks–suppressingwagesandincreasinginequality–ratherthanaugmentinghumancapabilitiestocreatenewvalue.AsthesocialimpactofAIsurfaces,wecouldseeapolicyshiftawayfroman“all-out”approach.Theyear-endCEWCexplicitlycalledto“improveAIgovernance”(Xinhua,Dec11th,2025).TheMoHRSSisreportedlypreparedlabormarketimpact(Xinhua,Jan27th).Restrictivemeasureswouldnotbeasurprisetousiftechnologyleanstoofarinpureautomation.Forexample,thelarge-scaledeploymentofrobotaxiwillhavetoconsideritsimplicationsfor>10mndrivers,notjustitstechnicalreadiness.Webelievelong-termpolicyislikelytofavorcompaniesthatuseAItoaugmentworkersandcreatenewtasks,ratherthanthosefocusedpurelyonsubstitution.astrongconsensusamongeconomistsandinternationalorganizationssuchastheIMF(see,forexample,IMF,Dec12th,2025)thgreatersupportfortheruralelderlyandparentingfamilies.Arobustsocialsafetynetisnolongerjustasocialissuebutaneconomicprerequisiteforlarge-scaleAIdeployment(Figure33andFigure34).TheemergingimpactofautomationandAIonemployment–particularlyfortheyouthandgigworkers–makesitmoreurgentthanevertostrengthenjobprotection,unemploymentbenefitsandretrainingprograms,inourview.GovernmentspendingonsocialsecurityinturnenablesafasterandsmootherAItransition.thatwithoutintervention,AItendstoconcentratewealthandincreasecapital’sAcemoglu,2024).FiscalpolicywilllikelyadapttoensureamoreequitabledistributionofAI’sproductivitygains,agrowingpriorityunderthe“commonprosperity”campaign.Thiscouldoccurthroughtwochannels:[1]Primarydistributionvia.directwagesupport.incomegrowthplan”(城乡居民增收计划,Xinhua,Jan20th),whichmayguidefirmstoraisewages,whilethegovernmentisalsohikingminimumwagesdirectly.Growthinaveragedminimumwagesacrossprovinces(~RMB2,270/month)pickedupto~8.1%YoYin2025,comparedwith~4%2021-24.ThisreflectsadeliberateefforttocounterAI'sdisinflationarypressureonwages.[2]Secondarydistribueconomycurrentlybenefitsfromsupportivetaxincentivesandevensubsidies(Figure35),wethinkinvestorsshouldmodelaplausiblefuturescenariowherethesearephasedoutorreplacedwithtargeted“AItaxes”tofundsocialprogramsasthesectormatures.Ingeneral,thisalignswithourviewthattheeraofbigtaxcutsisbehindus.improvingwork-lifebalanceisakeychanneltotranslateAI’sproductivitygainsintodomesticconsumption(Figure36).Moreleisuretimeisapreconditionforaservices-tiltedconsumptionrebalancing,andtheAI-ledefficiencyleapallowsemployeestoworkfewerhoursifemploymentiskeptstable.Policyappearstobemovinginthisdirection,withtheNDRCpledgingtooptimizeholidayarrangements(SCIO,Jan20th)andtheMoHRSSmentioningrevisionstoleaveguidance(Xinhua,Jan27th).Thesemeasureenforcementoflaborlaws,wouldexpandleisuretimefromthecurrentbaseof13belargelycost-neutraltofirmswhilerepresentingastructuraltailwindfor%UrbanHouseholdDisposableIncome8765%UrbanHouseholdDisposableIncome8765432100◆◆◆48.5◆◆Top20%60~80%Middle20%20~Avg.DisposableIncome%ShareinPre-TaxNational%0——Top10%——Middle50%BottomTaxRevenueas%of50HouseholdConsumptionRatioandAvg.WorkHours(OConsumptionConsumption03February202603February2026IfyouarevisuallyimpairedandwouldliketospeaktoaCitirepresentativeregardingthedetailsofthegraphicsinthisdocument,pleasecallUSA1-888-500-5008(TTY:711),fromoutsidetheUS+1-210-677-3788AppendixA-1Analysts’compensationisdeterminedbyCitiResearchmanagementandCitigroup’sseniormanagementandisbaseduponactivitiesandservicesintendedtobenefittheinvestorclientsofCitigroupGlobalMarketsInc.anditsaffiliates(the“Firm”).Compensationisnotlinkedtospecifictransactionsorrecommendations.LikeallFirmemployees,analystsreceivecompensationthatisimpactedbyoverallFirmprofitabilitywhichincludesinvestmentbanking,salesandtrading,andprincipaltradingrevenues.Onefactorinequityresearchanalystcompensationisarrangingcorporateaccesseventsbetweeninstitutionalclientsandthemanagementteamsofcoveredcompanies.Typically,companymanagementismorelikelytoparticipatewhentheanalysthasapositiveviewofthecompany.ForfinancialinstrumentsrecommendedintheProductinwhichtheFirmisnotamarketmaker,theFirmisaliquidityproviderinsuchfinancialinstruments(andanyunderlyinginstruments)andmayactasprincipalinconnectionwithtransactionsinsuchinstruments.TheFirmisaregularissueroftradedfinancialinstrumentslinkedtosecuritiesthatmayhavebeenrecommendedintheProduct.TheFirmregularlytradesinthesecuritiesoftheissuer(s)discussedintheProduct.TheFirmmayengageinsecuritiestransactionsinamannerinconsistentwiththeProductand,withrespecttosecuritiescoveredbytheProduct,willbuyorsellfromcustomersonaprincipalbasis.UnlessstatedotherwiseneithertheResearchAnalystnoranymemberoftheirteamhasviewedthematerialoperationsoftheCompaniesforwhichaninvestmentviewhasbeenprovidedwithinthepast12months.Forimportantdisclosures(includingcopiesofhistoricaldisclosures)regardingthecompaniesthatarethesubjectofthisCitiResearchproduct("theProduct"),pleasecontactCitiResearch,388GreenwichStreet,Attention:Legal/Compliance[E6WYB6412478].Inaddition,thesameimportantdisclosures,withtheexceptionoftheValuationandRiskassessmentsandhistoricaldisclosures,arecontainedontheFirm'sdisclosurewebsiteat/cvr/eppublic/citi_research_disclosures.ValuationandRiskassessmentscanbefoundinthetextofthemostrecentresearchnote/reportregardingthesubjectcompany.PursuanttotheMarketAbuseRegulationahistoryofallCitiResearchrecommendationspublishedduringthepreceding12-monthperiodcanbeaccessedviaCitiVelocity(/cv2)oryourstandarddistributionportal.Historicaldisclosures(foruptothepastthreeyears)willbeprovideduponrequest.Thelegalentitiesemployingtheauthorsofthisreportarelistedbelow(andtheirregulatorsarelistedfurtherherein).Non-USresearchanalystswhohavepreparedthisreport(i.e.,allresearchanalystslistedbelowotherthanthoseidentifiedasemployedbyCitigroupGlobalMarketsInc.)arenotregistered/qualifiedasresearchanalystswithFINRA.Suchresearchanalystsmaynotbeassociatedpersonsofthememberorganization(butareemployedbyanaffiliateofthememberorganization)andthereforemaynotbesubjecttotheFINRARule2241restrictionsoncommunicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalystaccount.CitigroupGlobalMarketsAsiaLimitedXinyuJi;XiangrongYuAnyprice(s)ofinstrumentsmentionedinrecommendationsareasofthepriorday’smarketcloseontheprimarymarketfortheinstrument,unlessotherwisestated.ThecompletionandfirstdisseminationofanyrecommendationsmadewithinthisresearchreportareasoftheEasterndate-timedisplayedatthetopoftheProduct.IftheProductreferencesviewsofotheranalyststhenpleaserefertothepricechartorratinghistorytableforthedate/timeofcompletionandfirstdisseminationwithrespecttothatview.Europeanregulationsrequirethatwherearecommendationdiffersfromanyoftheauthor’spreviousrecommendationsconcerningthesamefinancialinstrumentorissuerthathasbeenpublishedduringthepreceding12-monthperiodthatthechange(s)andthedateofthatpreviousrecommendationareindicated.Pleaserefertothetradehistoryinthepublishedresearchorcontacttheresearchanalyst.CitiResearchhasimplementedpoliciesforidentifying,consideringandmanagingpotentialconflictsofinterestarisingasaresultofpublicationordistributionofinvestmentresearch.Adescriptionofthesepoliciescanbefoundat/cvr/eppublic/citi_research_disclosures.TheproportionofallCitiResearchresearchrecommendationsthatweretheequivalentto"Buy","Hold","Sell"attheendofeachquarterovertheprior12months(withthe%ofthesethathadreceivedinvestmentfirmservicesfromCitiintheprior12monthsrecommendationsotherthanforequity(whosedefinitionscanbefoundinthecorrespondingdisclosuresections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