The Resurgence of Marxist Economics in China through AI

September 22, Kathmandu – Marxist economics, which had faded into obscurity amid the expansion of capitalism in China, has been revitalized by the artificial intelligence (AI) revolution. According to Yanis Varoufakis, former Greek finance minister and senior researcher at Fudan University, until a few years ago, Marxism was treated merely as a formal subject in China’s top universities. However, the rapid development of AI and robotics has injected new energy and ideological strength into Chinese Marxist economists.

Chinese Marxists have long expressed concern about China drifting toward a capitalist trajectory similar to that of North Atlantic economies, which risk falling into a ‘rent trap’—where investment shifts away from productive sectors toward rising real estate or asset values. As competition intensifies in productive industries and profit rates decline, investors are attracted to low-risk, higher-return sectors such as real estate and finance. This leads to industrial decline and weakening of the country’s industrial foundation. Many viewed the collapse of Evergrande, China’s massive real estate company, as a signal of such a ‘rent trap.’ Nevertheless, government scholars claim that the Chinese state apparatus has been averting this crisis through strategic investment in areas like green energy, electric vehicles, semiconductors, and AI.

Still, Marxist economists harbor distinct worries. At the beginning of 2025, some economists analyzed China’s massive trade surplus as a result of class struggle between workers from both Chinese and Western classes. China’s accumulated savings of approximately 170 trillion Chinese yuan (around 25 trillion US dollars), if used solely to purchase assets, would not enable China to escape the rent trap. Furthermore, if these funds are invested in developing countries, China risks becoming a ‘rentier’ nation, extracting profits from other countries similar to Western powers.