China's People's Daily accuses US of double standards on AI distillation

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Reviewed by
Anirudha BScanX News Team
Key Highlights
  • People's Daily accused the US of applying "naked double standards" to AI model distillation, treating it as an industry norm for American firms but an attack when used by Chinese companies.
  • The commentary called for the US and China to cooperate on AI risk management and build an open, inclusive environment for AI development.
  • China argued the US has elevated an industry practice to a national-security issue to maintain AI dominance.
  • Nvidia Corp. CEO Jensen Huang is reportedly expected to join Trump at a state dinner honoring Xi Jinping next week, as bilateral AI safety talks are being prepared.
  • The US has previously accused China of large-scale intellectual property theft from American AI companies, which Beijing has rejected.
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China's People's Daily accused the United States of applying "naked double standards" to AI model distillation, arguing that Washington treats the same technique as routine practice for American firms but frames it as an attack when used by Chinese companies.

China calls for open AI development

The People's Daily, the official newspaper of China's ruling Communist Party, stated that artificial intelligence is a new domain for human development and should not be controlled by a handful of powerful countries. The commentary argued that AI must not become an arena for zero-sum competition among major powers. It called on the US and China to cooperate in managing AI risks and to foster an open, inclusive, and universal environment for the technology's development.

Beijing's charge of double standards

The commentary specifically targeted Washington's concerns over AI model distillation, a technique in which developers use outputs from larger models to train smaller systems and reduce development costs. China argued that US companies also use the technique extensively.

"According to US logic, when American enterprises use distillation it is an 'industry standard practice,' while when Chinese enterprises apply it, it constitutes an 'attack,'" the paper said. "This is naked double standards."

The commentary further accused the US of elevating an industry practice to a national-security issue in order to maintain dominance in AI. The White House did not immediately respond to a request for comment.

US-China AI tensions and upcoming talks

The remarks come as Washington and Beijing prepare for bilateral discussions covering AI safety and related technology issues. Nvidia Corp. CEO Jensen Huang is reportedly expected to join President Donald Trump at a state dinner honoring Chinese President Xi Jinping next week. Trump made his first state visit to China since 2017 in May.

The US has previously accused China of large-scale intellectual property theft from American AI companies, allegations Beijing has rejected.

Key positions Details
China's stance AI must not become a monopoly of great powers or arena for zero-sum competition
China's accusation US applies double standards to AI model distillation
US concern AI model distillation framed as a national-security issue
Upcoming event State dinner with Xi Jinping; Jensen Huang reportedly expected to attend
Bilateral agenda AI safety and related technology discussions

How might the upcoming bilateral AI safety talks address the specific dispute over model distillation techniques?

What impact could Jensen Huang's attendance at the state dinner have on Nvidia's export restrictions to China?

Will the US adjust its national security framework for AI if China successfully demonstrates that distillation is a standard industry practice?

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China fixed-asset investment falls 7.2% as capital shifts to tech

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Reviewed by
Ritika DScanX News Team
Key Highlights
  • Fixed-asset investment fell 7.2% YoY to 29.3 trillion yuan in first eight months
  • Intellectual property product investment rose 9.2%, accounting for 15.2% of total
  • High-tech industry investment grew 5.2%, accelerating for third consecutive month
  • Lithium-ion battery manufacturing investment surged 20.6% on EV and storage demand
  • Internet services investment jumped 42% as part of modern infrastructure push
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China’s fixed-asset investment declined 7.2% year-on-year in the first eight months of 2026, reflecting a broader structural shift toward technological innovation and advanced industries despite overall contraction.

Wang Guanhua, spokesperson for the National Bureau of Statistics (NBS), attributed the decline to multiple factors including heat waves, typhoons, and floods that disrupted construction in some regions. Greater external uncertainty and an ongoing transition from traditional to new growth drivers also prompted businesses to adopt a more cautious approach to investment decisions.

Investment in innovation gains momentum

Despite the aggregate decline, fixed-asset investment remained substantial at around 29.3 trillion yuan (US$4.33 trillion). Investment in intellectual property products rose 9.2% year-on-year, accelerating by 0.1 percentage point from the first seven months. This segment accounted for 15.2% of total investment, up 2.3 percentage points from a year earlier.

Specifically, investment in computer software and databases grew 10.9%, while research and development investment increased 7.8%. Together, these two areas accounted for more than 95% of investment in intellectual property products.

Capital flows into new growth engines

High-tech industry investment grew 5.2% year-on-year through August, accelerating for the third consecutive month. Investment in specialized electronic materials manufacturing and integrated circuit manufacturing rose 8.5% and 12%, respectively, driven by growing demand for artificial intelligence technologies.

Investment in lithium-ion battery manufacturing surged 20.6%, fueled by new-energy vehicle expansion and energy storage demand. Equipment purchase investment rose 9.3%, accounting for 19.5% of total investment, reflecting the continued impact of China’s large-scale equipment renewal program.

Major infrastructure projects gather pace

Investment in modern infrastructure is advancing as major projects get underway in the first year of the 15th Five-Year Plan period (2026-2030). Significant progress has been made in developing the “six networks” infrastructure, covering water, power, computing, next-generation communications, urban pipelines, and logistics.

In the first eight months, investment in internet and related services grew 42% year-on-year. Investment in air transportation, water transportation, and electricity supply increased 16.7%, 14.7%, and 12.7%, respectively. As of June 30, more than 70 major computing-power corridors had been built around national computing hubs.

What the Numbers Show

The divergence between the 7.2% decline in total fixed-asset investment and the 9.2% growth in intellectual property products highlights a deliberate reallocation of capital. With IP products now representing 15.2% of total investment—up 2.3 percentage points from a year earlier—the data suggests that while aggregate spending has contracted due to weather and caution, the share of capital directed toward high-value, innovation-driven sectors is expanding significantly relative to the whole.

How might the 7.2% contraction in aggregate fixed-asset investment impact China's short-term GDP growth targets for the remainder of 2026?

Will the surge in lithium-ion battery and integrated circuit investments lead to overcapacity concerns similar to previous cycles, or is demand growth sufficient to absorb the capital influx?

To what extent will the 'six networks' infrastructure projects under the 15th Five-Year Plan stimulate downstream private sector spending in computing and logistics?

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