AI-era trade challenges demand cooperation

Editor’s note: As investment in artificial intelligence increases, how the associated demand transmits along global supply chains and how AI will reshape the global trade landscape and its mode of operation warrant close examination. People’s Daily Overseas Edition spoke to Zhang Monan, deputy director of the Department of US and European Studies at the China Center for International Economic Exchanges; and Wang Zhimin, researcher at the Academy of China Open Economy Studies, University of International Business and Economics, to explain the issue. Below are excerpts of the interviews. The views don’t necessarily represent those of China Daily.

As AI becomes embedded in traditional industries, its ripple effects on upstream and downstream production will become more apparent, spurring demand for new equipment, software and digital services.

AI is increasingly being applied in manufacturing, as smart production can optimize processes, reduce costs and enhance enterprises’ capacity for flexible manufacturing, enabling them to better meet small-batch, diverse and highly tailored orders. At the same time, as AI is being integrated into automobiles, robotics and smart devices, it enhances their technological sophistication and added value, driving related industries to higher tiers of the global value chain.

The changes also extend to cross-border transactions. AI helps businesses overcome language and information barriers, making market analysis, product design, customer service and cross-border marketing more efficient. In logistics, smart technologies optimize warehouse management, transportation scheduling and inventory allocation, reducing transaction costs and improving order fulfillment.

While AI offers latecomer nations new opportunities to leapfrog technological barriers, it also risks exacerbating the digital divide due to disparities in technology, infrastructure and talent. Without conditions conducive to development, some economies may struggle to enter the key nodes of emerging supply chains and fully benefit from global trade growth.

Narrowing these gaps requires stronger international cooperation in digital infrastructure, technology application and talent development to enhance developing countries’ participation in the digital economy and international trade.

In recent years, through the Digital Silk Road, China has worked with various countries on digital infrastructure and smart cities, creating favorable conditions for digital industries and expanded economic and trade exchanges.

The widespread use of AI also brings new challenges for trade rules. With data, algorithms and intelligent services playing a growing role in cross-border transactions, issues such as market access, cross-border data flows, privacy protection, intellectual property rights and security certification are becoming increasingly critical.

In particular, concerns over data usage authorization during AI model training and intellectual property ownership of generated content impose new demands on existing regulations.

As countries accelerate their AI development, differences in technical standards, regulatory requirements and industrial policies may emerge. Future disputes and frictions in international trade may go beyond trade balances and product volumes to include technology usage, security assurances and the fairness of trade rules.

To address these emerging issues, international cooperation is becoming all the more essential. Nations must improve laws, technical standards and governance systems, while strengthening international coordination and alignment to create a more stable regulatory environment for technology application and cross-border trade.

In the future, challenges and opportunities for cooperation will coexist. The AI value chain is intricately interconnected, and its technological applications and risks are transnational. Strengthening international coordination and collaboration is not only vital for tackling shared challenges but also instrumental in unlocking the long-term opportunities AI can bring to global trade.