Last week, we featured a piece on how China’s success is underpinned by the social reforms and the unleashing of its human potential the hard way. This piece shows another aspect of Chinese human capital that isn’t as much about its competence as it is about its adaptability and resilience, built through its painful period of economic transformation. The author Zilan Qian researches and writes about AI and China, and is a research associate at Oxford China Policy Lab. He frames it in the context of fears across the world about AI taking away jobs, but not in China:
“Stanford University’s 2026 AI Index Report shows that more than 85% of Chinese respondents see AI as more beneficial than harmful, compared to less than 45% of respondents in the United States…
…Why does Chinese society, which suffers from acute job loss and a youth unemployment rate close to 17%, embrace a technology it knows is likely to take away more jobs?”
He posits that China has been through an economic transformation not too long ago that brought massive job losses as state owned enterprises were forced into the market economy:
“In December 1978, reeling from the economic wreckage of the Great Leap Forward and the Cultural Revolution, China’s Communist Party formally shifted its central task from class struggle to economic construction, launching Deng Xiaoping’s “Reform and Opening Up” and beginning a gradual dismantling of three decades of central planning. In 1992, the country formally declared a turn toward a socialist market economy — an acknowledgment that market forces, not central planners, would now drive growth.
The country’s enterprises, built for a planned economy, were suddenly exposed to market competition — and consequently began haemorrhaging money, especially in industries like steel and textiles. By 1997, the state had decided to consolidate the strategic enterprises and let the rest restructure, merge, or collapse. The slogan it coined was “reduce headcount, increase efficiency.
…Over 24 million workers in China lost their jobs in the state sector by the end of 1999. The layoffs were concentrated in the northeast — Liaoning, Heilongjiang, Jilin — once the industrial heartland of socialist China and now called China’s rust belt. In 1957, the city of Shenyang’s Tiexi district produced the nation’s entire output of lathes, rock drills, gliders, rubber boats, and tower cranes, earning it the nickname “the Eastern Ruhr.”
By the late 1990s, 80% of the companies responsible for this output had gone out of production, and half of the district’s 300,000 industrial workers had been laid off. Between 1998 and 2000, nearly every year saw 7 to 9 million workers laid off nationally. Liaoning, for example, was laying off nearly 1,700 workers every single day.”
However, the market economy opened other doors: “… while the transition led northern China into economic crisis, the Pearl River Delta — geographically proximate to Hong Kong and Macau, home to China’s first Special Economic Zones, and the ancestral homeland of much of the Chinese diaspora in Southeast Asia and beyond — embraced rapid modernization and internationalization. The historical “land of fish and rice” became the “world factory.” Hong Kong investors established over 65,000 factories, employing about six million workers in the Delta. From 1991 to 2001, the Pearl River Delta’s regional GDP grew almost eightfold, and its population increased from 20 to 43 million.
For these citizens, the new economy meant good lives, which now included new technology….China’s tech giants — Alibaba, Tencent, and Baidu — were all founded between 1998 and 2000. By the end of 2000, the number of internet users in China had jumped from 3000 in early 1995 to 22.5 million. In 2001, China joined the WTO. Urbanization accelerated, and the growth of the middle class fueled demand for luxury goods, tourism, and better nutrition. The number of private cars in China went up from 1 million in 1992 to almost 10 million by 2002. Many people envisioned a hopeful future in which they could acquire new clothes, new luxuries, and new technology in the new millennium.
…In the span of a decade, Chinese society simultaneously experienced rapid economic growth and extreme economic precarity. Individuals were offered transformative opportunities and faced catastrophic crises, all due to the same factors…”
It is this ‘no pain, no gain’ belief embedded in Chinese policymaking that makes the Chinese better prepared for AI than the rest of the world: “For China’s policymakers, slowing development was never an option. A 1931 quote from Joseph Stalin — “those who fall behind get beaten” — that adapted by Mao Zedong in 1956 permeated society, serving as a cornerstone of high-level policy narratives. In China’s mnemonic practices, this phrase, linked to the idea that only development can sustain a nation’s independence, is the most significant lesson from the past, necessary to remember from China’s 20th-century history of war and colonization. “The reform is painful but rewarding,” wrote the state in 2012 in reference to the previous century.”
But for the Chinese people, it is not just the hope of a better future but the fear of being left behind that these surveys showing optimism don’t reveal: “The signal for individuals was clear: You had better catch the “last bus” to seize the fleeting opportunity. If you fail, no one, even the state, will back you up. This mentality undergirded China’s development at the turn of the century and prevails today. Whether it involves market, education, industrial, or technological reforms, people in China are frenetic about new things because they are always seeking the trend to follow. In Xiang’s words, “every bus is the last bus.”
In the late 1990s and early 2000s, learning English was the last bus. Globalization was the irreversible trend; only by learning English could Chinese people interact with the greater world. The state mandated English education as a core Gaokao subject and pushed it into primary schools in 2001, giving rise to cultural phenomena like “Crazy English” (fengkuang yingyu), wherein tens of thousands of people gathered in public stadiums to scream English phrases at the top of their lungs in a desperate collective bid for fluency. In the late 2010s, the mobile internet boom was the last bus. As tech giants like Alibaba and Tencent offered unmatched salaries in other industries, millions rushed to learn coding and enroll in computer science degrees in universities that were aggressively expanding computer science programs, only to find themselves facing a constantly decreasing employment rate.
In 2023, understanding AI was the last bus, and over 250 thousand people paid for rudimentary AI crash courses, terrified of being rendered obsolete overnight. In 2026, OpenClaw was the last bus, with thousands of people — retirees, white-collar workers, housewives — lining up outside tech company offices for engineers to install the agent directly onto their phones.”
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