Key facts
- China plans to scale back the APEC summit in Shenzhen, moving some meetings online.
- Member economies are opposing the scaled-back APEC plans, calling them unprecedented.
- US executives cited limited scheduling details and few expected breakthroughs for their lukewarm stance.
- US and China have established a dedicated channel for discussing AI risks and incidents.
- The US and Chinese AI sectors are facing financial pressures, with hyperscalers raising significant debt.
Senior American executives are reportedly unenthusiastic about attending the upcoming Asia-Pacific Economic Cooperation (APEC) summit and related business events in Shenzhen next month. Sources familiar with the matter cited limited scheduling details, a lack of expected breakthroughs, and insufficient opportunities for meaningful engagement as reasons for their lukewarm stance.
China, which is hosting the APEC forum, has proposed moving key meetings, including those of foreign and trade ministers, to an online format. This move has prompted backlash from other member economies, who view it as unprecedented and potentially undermining the spirit of APEC by restricting dialogue opportunities. Some critics suggest China aims to use the scaled-down event primarily for image enhancement and to showcase its technological prowess, given Shenzhen's status as an innovation hub.
The decision to reduce the summit's scale and shift parts online is also seen by observers as an effort by China to increase predictability and prevent unexpected situations by limiting free interaction. The customary closed-door meetings among leaders, which have historically provided a space for candid exchanges, are also likely to be skipped.
Meanwhile, discussions between the US and China on artificial intelligence continue. Presidents Donald Trump and Xi Jinping are expected to meet again on the sidelines of the APEC summit, following their September agreement to foster a "constructive relationship of strategic stability." The two leaders have previously discussed AI risks and benefits, agreeing to establish a communication channel for AI incidents. However, progress has largely focused on AI risks, with less attention paid to the economic challenges of the AI race.
Both the US and Chinese AI sectors are facing financial strains. US hyperscalers have seen a significant drop in free cash flow and have raised substantial debt to fund continued expansion, while Chinese tech giants have experienced a swing from positive to negative free cash flow. This suggests that neither country's AI sector can currently sustain its growth solely from operations.