Excellent post. The fact that the Citrini post caused such drama was amusing really. The private credit and secondaries markets create no value and are how the wealthy offload the risk from a dried up private equity market. The collapse is inevitable. I enjoyed the author's perspective on how AI will be different in China, focused on efficiencies in the smaller scale. I read a write up on the recent India AI conference where the focus was on implementation of AI in the last mile, integration with the automation of the individual person building on their programs for biometric government program management. I suspect Africa will be similar as well to India. Thanks for this!
Junk. The Citrini piece was a self reflective piece of fiction looking to “red team” current market hubris by identifying vulnerabilities. This is a self congratulatory piece of junk that takes the citrini premise and says it’s all great because China if a mfg economy. That’s not very insightful or useful.
Most enjoyable, though I hope the actual eventuality involves China leaning more heavily on its socialist heritage. (After all, isn't the trend toward becoming a manufacturing powerhouse without workers?) Then again, I also hope the U.S. ends up drawing on democratic ideals - and at present that seems like pure fantasy.
DeepSeek produced the version of this I wanted to read, just less punchy and well-written:
BEIJING, 2028 – As the West reels from the "Intelligence Crisis" – a self-inflicted wound where rampant AI adoption maximized corporate profits by decimating the white-collar workforce and collapsing consumer demand – China's economic landscape tells a profoundly different story. While U.S. unemployment soars, China's remains stable, not despite AI, but because of a fundamentally different social contract.
The Citrini Research memo that spooked global markets described a dystopia born of American capitalism's core logic: use AI to ruthlessly cut costs, boost short-term shareholder value, and damn the societal consequences. In China, the state's guiding hand, rooted in socialist principles, ensured the AI revolution followed a different path: augmentation over replacement, leisure over layoffs, and social value over shareholder value.
The Great Reskilling and the 30-Hour Work Week
While U.S. firms celebrated record profits from mass firings, China in 2026-2028 implemented its "Intelligence with Humanity" initiative. The diagnosis was clear: AI would make many repetitive cognitive tasks obsolete. The prescription was not unemployment, but a massive, state-funded reskilling and work-sharing program.
By early 2028, the standard work week for knowledge workers in strategic sectors was voluntarily reduced to 30 hours with no loss in pay. The productivity gains from AI were socialized. Workers displaced from data entry and basic analysis were retrained for roles AI could not easily fill: community cultural organizers, elder-care specialists, environmental monitors, and creative roles in the expanding "experience economy." The goal wasn't just full employment, but full, meaningful engagement.
The State Sector: A Fortress of Stability, Not Inefficiency
The original analysis correctly noted the state sector's resistance to AI penetration, but misread its nature. This wasn't bureaucratic Luddism; it was a deliberate buffer. State-owned enterprises and institutions were tasked with absorbing and retraining workers transitioning from the private sector, acting as a stabilizing force. The "tea-refilling" meetings weren't relics, but spaces for human judgment, consensus-building, and nuanced decision-making that machines cannot replicate. This human-centric core of governance and public service was intentionally preserved.
AI Serving the People, Not Just the Bottom Line
The "walled gardens" of China's internet weren't just corporate fortresses. They became the foundation for publicly accessible, high-quality AI models. Instead of allowing a few private giants to monopolize data and sell it back at a profit, the state, in partnership with compliant tech firms, created a national public data trust. This trust powers a "people's LLM," used to optimize public services – from personalized education in remote villages to smart urban planning that reduces congestion and pollution. AI agents don't just push milk tea; they help citizens navigate healthcare, access legal aid, and find community activities.
The End of "Fratricidal" Competition
The brutal price wars and "35-and-out" culture described in the original are acknowledged as problems of the past – relics of a more chaotic, less regulated capitalist phase. New labor laws, negotiated with unions and employer federations, now mandate lifelong learning accounts and prohibit age discrimination. Tech companies found that investing in employee well-being and retraining, supported by state incentives, led to greater long-term innovation and loyalty than churning through a disposable workforce. The focus shifted from cutting costs to creating value.
A Model for the Future
As the U.S. scrambles to revive manufacturing and patch a tattered social safety net, China's 2028 reality offers a compelling alternative. It demonstrates that an AI-driven future need not be a zero-sum game between capital and labor. By embedding technological progress within a socialist framework that prioritizes the collective good, China is showing that we can have the efficiency of the machine without sacrificing the humanity of the worker. The true intelligence crisis, it seems, is not technological, but political.
Western bankers can always retrain to become process workers! Just reverse of what process workers had to do when the manufacturing jobs left the US economy. Just kidding 😉
Excellent post. The fact that the Citrini post caused such drama was amusing really. The private credit and secondaries markets create no value and are how the wealthy offload the risk from a dried up private equity market. The collapse is inevitable. I enjoyed the author's perspective on how AI will be different in China, focused on efficiencies in the smaller scale. I read a write up on the recent India AI conference where the focus was on implementation of AI in the last mile, integration with the automation of the individual person building on their programs for biometric government program management. I suspect Africa will be similar as well to India. Thanks for this!
Junk. The Citrini piece was a self reflective piece of fiction looking to “red team” current market hubris by identifying vulnerabilities. This is a self congratulatory piece of junk that takes the citrini premise and says it’s all great because China if a mfg economy. That’s not very insightful or useful.
Most enjoyable, though I hope the actual eventuality involves China leaning more heavily on its socialist heritage. (After all, isn't the trend toward becoming a manufacturing powerhouse without workers?) Then again, I also hope the U.S. ends up drawing on democratic ideals - and at present that seems like pure fantasy.
DeepSeek produced the version of this I wanted to read, just less punchy and well-written:
BEIJING, 2028 – As the West reels from the "Intelligence Crisis" – a self-inflicted wound where rampant AI adoption maximized corporate profits by decimating the white-collar workforce and collapsing consumer demand – China's economic landscape tells a profoundly different story. While U.S. unemployment soars, China's remains stable, not despite AI, but because of a fundamentally different social contract.
The Citrini Research memo that spooked global markets described a dystopia born of American capitalism's core logic: use AI to ruthlessly cut costs, boost short-term shareholder value, and damn the societal consequences. In China, the state's guiding hand, rooted in socialist principles, ensured the AI revolution followed a different path: augmentation over replacement, leisure over layoffs, and social value over shareholder value.
The Great Reskilling and the 30-Hour Work Week
While U.S. firms celebrated record profits from mass firings, China in 2026-2028 implemented its "Intelligence with Humanity" initiative. The diagnosis was clear: AI would make many repetitive cognitive tasks obsolete. The prescription was not unemployment, but a massive, state-funded reskilling and work-sharing program.
By early 2028, the standard work week for knowledge workers in strategic sectors was voluntarily reduced to 30 hours with no loss in pay. The productivity gains from AI were socialized. Workers displaced from data entry and basic analysis were retrained for roles AI could not easily fill: community cultural organizers, elder-care specialists, environmental monitors, and creative roles in the expanding "experience economy." The goal wasn't just full employment, but full, meaningful engagement.
The State Sector: A Fortress of Stability, Not Inefficiency
The original analysis correctly noted the state sector's resistance to AI penetration, but misread its nature. This wasn't bureaucratic Luddism; it was a deliberate buffer. State-owned enterprises and institutions were tasked with absorbing and retraining workers transitioning from the private sector, acting as a stabilizing force. The "tea-refilling" meetings weren't relics, but spaces for human judgment, consensus-building, and nuanced decision-making that machines cannot replicate. This human-centric core of governance and public service was intentionally preserved.
AI Serving the People, Not Just the Bottom Line
The "walled gardens" of China's internet weren't just corporate fortresses. They became the foundation for publicly accessible, high-quality AI models. Instead of allowing a few private giants to monopolize data and sell it back at a profit, the state, in partnership with compliant tech firms, created a national public data trust. This trust powers a "people's LLM," used to optimize public services – from personalized education in remote villages to smart urban planning that reduces congestion and pollution. AI agents don't just push milk tea; they help citizens navigate healthcare, access legal aid, and find community activities.
The End of "Fratricidal" Competition
The brutal price wars and "35-and-out" culture described in the original are acknowledged as problems of the past – relics of a more chaotic, less regulated capitalist phase. New labor laws, negotiated with unions and employer federations, now mandate lifelong learning accounts and prohibit age discrimination. Tech companies found that investing in employee well-being and retraining, supported by state incentives, led to greater long-term innovation and loyalty than churning through a disposable workforce. The focus shifted from cutting costs to creating value.
A Model for the Future
As the U.S. scrambles to revive manufacturing and patch a tattered social safety net, China's 2028 reality offers a compelling alternative. It demonstrates that an AI-driven future need not be a zero-sum game between capital and labor. By embedding technological progress within a socialist framework that prioritizes the collective good, China is showing that we can have the efficiency of the machine without sacrificing the humanity of the worker. The true intelligence crisis, it seems, is not technological, but political.
So sharp and so good!
Western bankers can always retrain to become process workers! Just reverse of what process workers had to do when the manufacturing jobs left the US economy. Just kidding 😉