China Economist Warns AI Spending Boom Poses Cross-Market Financial Risks
Lian Ping, chairman of the China Chief Economist Forum, said at the Sixth Shanghai International Finance Forum in October 2026 that financial risks are building alongside the rapid inflow of resources into the artificial intelligence industry. His remarks focused on risks within the AI industry itself and those generated by financial support for AI.
Lian said the global AI compute race is driving large-scale capital expansion by technology companies. Huge investment is needed for computing clusters, data centers, high-end chip procurement and power infrastructure. According to forecasts cited by Lian, capital expenditure by the world's five largest tech giants could reach $800 billion in 2026, nearly double the 2025 level, and could rise to $1.2 trillion in 2027. Over the next five years, global AI data center construction may require $5 trillion to $7 trillion in funding.
He warned that direct and indirect financing are flowing heavily into AI, pushing up corporate debt and leverage. Circular financing and credit nesting in the sector increase the possibility of financial risks transmitting across entities and markets. Some tech firms raise funds through special purpose vehicles (SPVs); if computing power demand falls short, implicit guarantees could turn into real repayment pressure. As tech giants expand bond issuance and their bonds are included in mainstream bond indexes, a market reassessment of off-balance-sheet risks could trigger concentrated selling and liquidity shocks, and spill over to equity markets through bond-equity linkages.
Lian also noted that the AI investment boom has raised risk appetite, with some firms forming leveraged chains through asset purchases and mortgage financing. The growing scale of leveraged ETFs tied to AI and tech stocks could amplify volatility; a reversal in AI sentiment might trigger forced liquidations and cascading selling. He said some market heat is reasonable for the industry's growth, but financial risks must be watched closely and guarded against.
