China’s central bank adviser says AI won’t change monetary policy framework

China’s central bank will maintain its current monetary policy framework despite the growing influence of artificial intelligence on the economy, according to Huang Yiping, a central bank adviser and Peking University professor. His comments come as Beijing actively promotes AI adoption across key economic sectors and markets debate AI’s potential impact on future policy decisions.

What you should know: China’s monetary policy approach will remain unchanged as long as price stability remains the primary objective, regardless of AI’s economic influence.

• “The monetary policy framework will not change, if the goal is to achieve price stability, and I think that would probably remain the same,” Huang told the annual Bund Summit in Shanghai on Friday.
• However, the specific tools and techniques used to achieve price stability may need to adapt to accommodate new technology developments.

The big picture: This stance reflects China’s cautious approach to AI integration within its macroeconomic policy framework, prioritizing stability over rapid technological adaptation.

• The government is currently promoting AI adoption across key economic sectors while maintaining traditional monetary policy objectives.
• Rising market discussions about AI’s impact on future policy have prompted clarification from central bank advisers.

Key consideration: Huang raised an important question about whether successful AI implementation could create deflationary pressures that might require policy adjustments.

• “One small question is … if a successful AI revolution in the short term might be deflationary or push down prices? That certainly could raise the question whether the original, the lower, inflation targets should be maintained,” he said.
• This suggests that while the framework remains stable, specific inflation targets could face scrutiny if AI significantly impacts price levels.

Why this matters: China’s approach to AI and monetary policy could influence how other major economies balance technological advancement with financial stability, particularly as AI adoption accelerates globally and potentially reshapes traditional economic indicators.