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Sino-US Economic Relations, AI and Trade

Nov 14-2025   




*Source: China Finance 40 Forum (CF40)

 

On 23 October 2025, Robert Rubin, the 70th United States Secretary of the Treasury and Honorary Co-Chairman of the Council on Foreign Relations, engaged in dialogue with Huang Yiping, Dean of the National School of Development at Peking University, at the 2025 Bund Summit.

 

This marked the sixth time that the two experts had shared the stage at the Bund Summit. They discussed Trump 2.0 policies, US fiscal pressures and economic prospects, and AI development in depth, sharing their perspectives on Sino-US economic relations in the current climate.

 

During the dialogue, Rubin emphasized the following key points:

1. Although American social and political systems demonstrate resilience, Trump's policies have undoubtedly damaged the US economy, necessitating remedial measures in the future. The nation is facing severe fiscal challenges, and merely lifting the debt ceiling masks the underlying issue. The debt trajectory is unsustainable in the long term, and passing the One Big Beautiful Bill Act (OBBB) will significantly worsen America's fiscal position.

2. Trump's tariff policy is misguided because it will reduce economic efficiency, drive up consumer prices, suppress demand and pose inflationary risks. However, the impact of tariffs is not immediate, as businesses need time to adjust their prices. Tariffs are inherently regressive taxes and are not a wise choice from either an economic-growth or social-equity perspective. The US has other tax options that would be more conducive to growth and to alleviating inequality.

3. Federal Reserve Chair Powell has withstood persistent pressure from Trump to safeguard the Fed's independence. Although the US financial system remains robust, asset valuations have increased significantly, and it remains to be seen whether the underlying risks and returns are reasonably balanced.

4. AI plays a vital role in current economic growth and holds promising prospects, though it is not necessarily a driver of increased employment. Trump's policies could potentially create some manufacturing jobs, but the effect is unlikely to be significant. Globalization has delivered substantial benefits to the United States, yet the country has failed to formulate effective policies to address job losses resulting from trade liberalization and open markets. AI will exacerbate this challenge. The United States still lacks such policies, and the Trump administration has made no progress in this regard. Hopefully, advancement in this area will be seen someday.

5. AI represents a fundamental technological revolution with the potential to reshape economic activity and translate into productivity gains more rapidly. The “Solow paradox” does not apply to AI. While AI could help to resolve US fiscal challenges by boosting economic growth and increasing tax revenues, it also carries significant risks, including job displacement, heightened energy and water consumption, the threat of autonomous AI replacing human agency, and national-security threats — not to mention the spectre of war automation.

6. A constructive Sino-American relationship would be immensely beneficial. Both nations should collaborate within open markets and trade systems, exchange technologies and jointly tackle challenges such as the AI revolution, climate change, nuclear warfare and terrorism. Even if deliberately constrained by the US, China's technological-innovation capabilities are so formidable that it will ultimately achieve its technological-development goals. Cooperation benefits both nations.

7. The current direction of US policy remains largely contingent upon the leader's volatile personal whims, which subjects both China and the US to heightened uncertainty and unpredictability.

During the dialogue, Huang Yiping noted that the AI revolution may replicate the structural issues and inequalities brought about by globalization. While structural transformation is generally beneficial for the economy, we must remain vigilant regarding inequality. He emphasized that China and many other nations are strongly committed to open trade-systems and investment-systems and hope to see other countries take action to jointly uphold an open global system.

 

Sino-US Economic Relations, AI and Trade

Nov 14-2025   




*Source: China Finance 40 Forum (CF40)

 

On 23 October 2025, Robert Rubin, the 70th United States Secretary of the Treasury and Honorary Co-Chairman of the Council on Foreign Relations, engaged in dialogue with Huang Yiping, Dean of the National School of Development at Peking University, at the 2025 Bund Summit.

 

This marked the sixth time that the two experts had shared the stage at the Bund Summit. They discussed Trump 2.0 policies, US fiscal pressures and economic prospects, and AI development in depth, sharing their perspectives on Sino-US economic relations in the current climate.

 

During the dialogue, Rubin emphasized the following key points:

1. Although American social and political systems demonstrate resilience, Trump's policies have undoubtedly damaged the US economy, necessitating remedial measures in the future. The nation is facing severe fiscal challenges, and merely lifting the debt ceiling masks the underlying issue. The debt trajectory is unsustainable in the long term, and passing the One Big Beautiful Bill Act (OBBB) will significantly worsen America's fiscal position.

2. Trump's tariff policy is misguided because it will reduce economic efficiency, drive up consumer prices, suppress demand and pose inflationary risks. However, the impact of tariffs is not immediate, as businesses need time to adjust their prices. Tariffs are inherently regressive taxes and are not a wise choice from either an economic-growth or social-equity perspective. The US has other tax options that would be more conducive to growth and to alleviating inequality.

3. Federal Reserve Chair Powell has withstood persistent pressure from Trump to safeguard the Fed's independence. Although the US financial system remains robust, asset valuations have increased significantly, and it remains to be seen whether the underlying risks and returns are reasonably balanced.

4. AI plays a vital role in current economic growth and holds promising prospects, though it is not necessarily a driver of increased employment. Trump's policies could potentially create some manufacturing jobs, but the effect is unlikely to be significant. Globalization has delivered substantial benefits to the United States, yet the country has failed to formulate effective policies to address job losses resulting from trade liberalization and open markets. AI will exacerbate this challenge. The United States still lacks such policies, and the Trump administration has made no progress in this regard. Hopefully, advancement in this area will be seen someday.

5. AI represents a fundamental technological revolution with the potential to reshape economic activity and translate into productivity gains more rapidly. The “Solow paradox” does not apply to AI. While AI could help to resolve US fiscal challenges by boosting economic growth and increasing tax revenues, it also carries significant risks, including job displacement, heightened energy and water consumption, the threat of autonomous AI replacing human agency, and national-security threats — not to mention the spectre of war automation.

6. A constructive Sino-American relationship would be immensely beneficial. Both nations should collaborate within open markets and trade systems, exchange technologies and jointly tackle challenges such as the AI revolution, climate change, nuclear warfare and terrorism. Even if deliberately constrained by the US, China's technological-innovation capabilities are so formidable that it will ultimately achieve its technological-development goals. Cooperation benefits both nations.

7. The current direction of US policy remains largely contingent upon the leader's volatile personal whims, which subjects both China and the US to heightened uncertainty and unpredictability.

During the dialogue, Huang Yiping noted that the AI revolution may replicate the structural issues and inequalities brought about by globalization. While structural transformation is generally beneficial for the economy, we must remain vigilant regarding inequality. He emphasized that China and many other nations are strongly committed to open trade-systems and investment-systems and hope to see other countries take action to jointly uphold an open global system.