Alyssa Chen

Published: 7:00pm, 23 Aug 2026

The latest US AI and supply chain initiatives are doomed to fail, according to a prominent political scientist who also argued that efforts to restrict US companies’ access to low-cost Chinese models would backfire.

Instead, he argued, the United States and China should collaborate on driving global economic development to generate the external demand needed to sustain long-term growth.

“US frameworks such as Pax Silica, the chip alliance and the rare earth alliance explicitly target a third party, which is bound to fail,” Zheng Yongnian, dean of the School of Public Policy at the Chinese University of Hong Kong, Shenzhen, told a conference on Sunday.

The escalating technological rivalry between the world’s two largest economies has prompted Washington to set up the international groupings Zheng referred to in an effort to curb Beijing’s momentum and secure supply chains in areas such as artificial intelligence, semiconductors and critical minerals.

Earlier this month, Reuters reported that a draft State Department document had warned that members of Pax Silica could be excluded if they signed up to the alternative Chinese-led World Artificial Intelligence Cooperation Organisation.

Last month, US media outlet Axios also reported that the White House was considering adding several Chinese AI labs to a blacklist that could restrict their ability to use US technology.

The AI leadership contest between Washington and Beijing has reached a critical juncture with American firms such as OpenAI and Anthropic pushing high-cost models while cheaper Chinese models are rapidly expanding around the world.

Some US officials have called for a ban on using foreign open-source models – a move that one researcher has estimated could cost businesses up to US$12 billion per year.

Zheng said any efforts to curb the use of Chinese technology would be ignoring commercial reality.

“If the US bans American enterprises from using Chinese AI, it is self-harm and, from a corporate perspective, runs entirely counter to their development interests,” Zheng said in a recorded video address.

He also told the event, which was hosted by the Institute of Public Policy at South China University of Technology, that the two countries were catering to different markets.

American tech firms favoured an expensive, closed-source approach suited to affluent economies such as Japan and South Korea, whereas China’s cost-efficient open-source models offered near-peer performance accessible to developing nations, he said.

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Zheng also said America’s AI-driven growth model contained systemic risks, adding that over 40 per cent of current US economic expansion was tied to artificial intelligence.

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“A bursting of Washington’s AI bubble would trigger a cascading disaster for itself, spill over to all its economic partners and destabilise the entire global economy,” Zheng said.

He added that the US must instead ensure there were sufficient practical uses for its AI technology.

Despite political efforts in Washington to force a rift, complete economic decoupling was unfeasible because the world’s two largest economies were highly complementary, he argued.

Zheng said the US was ahead in areas such as basic scientific research, capital markets, software development, and agriculture and energy production, while China excelled at translating fundamental scientific research into applied technology, software, agricultural goods and energy.

To achieve genuine global economic rebalancing, he urged both powers to look beyond their frictions and focus on helping to boost economic growth in developing regions of Africa, Asia and Latin America as a way of increasing consumer demand.

Rather than engaging in zero-sum competition, Zheng said China and the US could cooperate on raising world consumption levels as a way of helping their economies to continue to grow.

Alyssa Chen

Alyssa joined the Post in 2023 as a reporter on China desk to cover diplomacy. Her interests lie in cross-strait relations and Sino-Japan relations.