China's Real Estate Problem and AI Leapfrogging

The growth model in China, which relied heavily on real estate, has become unsustainable and needs to change./nChina's business model transition does not necessarily mean an implosion of its economy./nChina's economy has been driven by factors such as moving up the value chain in exports, trade surplus, and consumption./nChinese households have a high savings rate and leverage against real estate is not a significant burden due to low interest rates./nReal estate in places like Australia, Canada, and the UK may be more concerning than in China due to mortgage rates./nAI in China is still in its early stages, and both the US and China have their advantages in AI development./nAI in China is relatively more attractively priced compared to the US./nFidelity recently held an investment conference in Shanghai focused on AI./nThe sentiment around AI in China may have started to decline.