China-US Competes Closely in AI, Economists Encourage Cooperation

JAKARTA - The competition for artificial intelligence or AI between China and the United States is getting tighter. However, economists remind the two big countries that they still need to work together, especially in the rules of safety and governance of AI, namely how to regulate, supervise, and ensure that AI is used safely.

According to a report by China Daily quoted Saturday, May 30, the US still excels in cutting-edge AI research, large AI models, and large computing power. However, China is considered to be fast catching up, especially in the application of AI in manufacturing, consumer services, and the real economy. The real economy means real sectors such as factories, trade, services, and daily production activities.

"There are two major players in the development of cutting-edge AI, namely China and the US," Nobel economist Michael Spence told China Daily. "There is almost no measurable difference in the performance of the two. China has already caught up."

Data from the Institute for Human-Centered AI at Stanford University shows that Chinese and US AI models have been alternating the global performance ranking since early 2025.

In the AI Index Report 2026, the best US model until March only had a slight lead, about 2.7 percent.

Former Deputy Managing Director of the IMF, Zhu Min, said the direction of the development of AI of the two countries is different.

According to Zhu, the US is pursuing artificial superintelligence, that is, AI whose ability exceeds human intelligence, through large AI models and large computing power. China is more focused on the benefits of AI for the real economy and daily life.

"China gives more weight to the practical benefits of AI for the real economy," Zhu said.

Spence assessed that China has an advantage in the systematic application of AI in many sectors. He said the approach was seen in China's 2026-2030 Five-Year Plan.

"The West talks a lot about spreading AI, but it hasn't really done it," said Spence.

Behind the race, the risk of AI is also increasing. Not only the economy, but also social, environmental, and potential military use.

Therefore, Zhu believes that China and the US need to build a "safety fence" for AI together. The term refers to rules and supervisory systems so that AI does not develop without control.

According to Zhu, the US tends to choose external supervision through rules and compliance. China has emphasized protection from within the system since the beginning of AI development.

"Both approaches are equally valid and can shape the future of AI governance," he said.

China Daily reported that China and the US have agreed to start intergovernmental dialogue on AI. Chinese Foreign Ministry spokesman Guo Jiakun said the two countries need to work together to promote the development of AI while improving its governance.