China Urges AI Experts to Steer Clear of US Travel Amid Security Concerns: WSJ Report

In a significant development regarding artificial intelligence (AI) and international relations, Chinese authorities have advised top AI researchers and entrepreneurs to refrain from traveling to the United States due to security concerns. This advice comes as part of broader apprehensions about the exposure of sensitive information and the potential for detention during trips abroad.

The Wall Street Journal reported that Chinese officials fear that AI experts traveling to the US could inadvertently share crucial insights about China’s advancements in this rapidly evolving field. Furthermore, there are worries that these executives might face detention and be used as leverage in ongoing US-China negotiations, recalling incidents like the arrest of a Huawei executive in Canada at the request of the US during former President Donald Trump’s administration.

According to the report, the White House and China’s State Council Information Office have not responded to inquiries regarding this matter. The directive extends to executives from major Chinese AI firms and other strategically significant sectors, such as robotics. They are advised against travel to the US and allied nations unless absolutely necessary.

For those who do travel, stringent protocols are in place. Travelers are required to:

• Report their travel plans before departure.
• Detail their activities and meetings upon returning to China.

Notably, Liang Wenfeng, the founder of DeepSeek AI, turned down an invitation to an AI summit in Paris scheduled for February. Similarly, another leader from the AI startup community canceled a planned visit to the US last year, following directives from Beijing.

The competition between the US and China in the AI sector is intensifying, with companies like DeepSeek recently unveiling AI models that claim to rival or even outperform established leaders such as OpenAI and Google, all while maintaining a significantly lower cost structure.

In a related context, in February, Chinese President Xi Jinping convened with top technology executives, urging them to “show their talent” and express confidence in China’s economic model and market.

China’s Manufacturing Sector Shows Signs of Growth

In addition to developments in the AI sector, China’s manufacturing activity has reportedly expanded at its fastest pace in three months. An official factory survey indicated that increased new orders and higher purchasing volumes contributed to this growth. The improvement is seen as a positive sign for policymakers, suggesting that stimulus measures introduced late last year are supporting recovery in the world’s second-largest economy.

The official purchasing managers’ index (PMI) increased to 50.2 in February, up from 49.1 in January. This marks the highest reading since November and exceeds analysts’ expectations of 49.9 based on a Reuters poll. Additionally, the non-manufacturing PMI, which includes services and construction, edged up to 50.4 from 50.2 in January.

As Chinese policymakers prepare to announce economic targets and policy support in the upcoming parliamentary meeting on March 5, investors are keenly watching for indications of further assistance for the struggling property sector and heavily indebted developers. China’s $18 trillion economy has met the government’s 2024 growth target of “around 5%,” but the performance has been inconsistent. Exports and industrial output have outpaced retail sales, while unemployment remains high.

Analysts predict that Beijing will maintain the same growth target for this year, although there is uncertainty regarding the pace at which policymakers can stimulate weak domestic demand, especially amid escalating trade tensions with the US. Zhang Zhiwei, chief economist at Pinpoint Asset Management, noted, “Since the PMI data is measured on a month-on-month basis, it may be affected by seasonal factors related to the Spring Festival in January and February.” He added, “The manufacturing data is relatively stable,” but cautioned that a clearer picture would emerge after the release of additional economic indicators.

China is set to publish trade data for January and February on March 7. Despite the positive PMI figures, other indicators such as new export orders, factory gate prices, and employment remained in negative territory in the previous month, although the rate of contraction showed signs of slowing. Employment figures reached a 22-month high.

China’s Strategy to Address External Economic Pressures

To sustain economic growth and counter external challenges, Chinese policymakers have committed to increasing fiscal spending, boosting debt issuance, and implementing further monetary easing. A meeting of senior Communist Party officials emphasized the need to take proactive measures to manage external shocks to the economy.

This meeting coincided with an announcement from former President Trump regarding plans to impose an additional 10% tariff on Chinese goods starting March 4. This action follows a previous 10% tariff imposed on February 4 as part of efforts to pressure Beijing to address the fentanyl crisis. The combined tariffs would amount to 20%, which is still lower than the 60% rate that Trump has previously threatened on the campaign trail.

China’s Commerce Ministry expressed hope for a swift resumption of negotiations with Washington, warning that failure to do so could lead to retaliatory measures. A recent Reuters poll estimated that the private sector Caixin PMI rose to 50.3 in February, up from 50.1 in January, with the data set to be released on March 3.