View of Shibuya Crossing with people crossing the street on March 20, 2026 in Tokyo.
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BEIJING — Artificial intelligence is encroaching on the domain of central bankers.
High-level meetings in Asia this month, including the International Monetary Fund and World Bank Annual Meeting in Bangkok last week and the Bund Summit in Shanghai this week, reflect increased scrutiny of technology, especially as the race for capital has pushed many government bond yields to multi-decade highs.
Federal Reserve Chairman Kevin Warsh said in Bangkok that AI is a positive economic “shock” that could “fundamentally” change monetary policy. He has scheduled a hearing on productivity and employment in the Bay Area on November 16th, and said he is creating a special committee to focus on AI.
Three days later in Beijing, People’s Bank of China Governor Ban Gongsheng devoted the last part of his Financial Street Forum keynote speech to AI, according to official records. He said the central bank will assess the impact of this technology, improve financial support for the AI industry and promote its application in the financial sector.
Guo Kai, director of think tank CF40 Institute, told CNBC on the sidelines of a conference on Tuesday that “the impact of AI on the global economy, jobs, China, everything” is at the top of the agenda at the central banker-dominated Bund summit.
AI and wages
“AI may already be impacting wage demand as workers worry about their jobs,” said former Federal Reserve Vice Chairman Donald Cohn. “Right now, we’re in a situation where the economy is at full employment, demand is pretty strong, and wages in the United States are, if anything, continuing to decline in both nominal and real terms,” he told CNBC on the sidelines of the Bund summit.
Kohn expects central bankers to discuss the employment implications of AI at an upcoming meeting of central bankers and financial regulators at the Bank for International Settlements in Basel, Switzerland.
Managing ripple effects
Sonali Jain Chandra, deputy director of the IMF’s Asia and Pacific Department, said at Tuesday’s Fund Roundtable that many Asian economies, from Indonesia to China, are vulnerable to a downturn in demand for AI due to its critical role in basic supply chains.
“This is a very important risk that policymakers should pay attention to,” he said. “And this is also why we argue that now is the time to build buffers, fiscal external buffers, to ensure that policymakers have room to react in the event of a recession.”
Adam Posen, director of the Peterson Institute for International Economics, said Tuesday on CNBC’s “Squawk Box Asia” that there was “surprise” at the resilience of the global economy, despite discussions at the IMF-World Bank meeting and the Bund summit about how vulnerable the global economy is to slowing U.S. AI spending and profitability.
He said that even if stock prices were to fluctuate, “a market correction for large-scale companies… in the short term we could end up with a situation similar to perhaps 1987 or 2000, where the profits would simply be transferred to adjacent industries and the real economy would not be affected much.”
