Asia Global Institute

Not even the AI candyfloss economy can defy reality forever

Friday, August 14, 2026

Not even the AI candyfloss economy can defy reality forever

Andrew Sheng, AGI Distinguished Fellow, warns of the growing disconnect between financial asset valuations and real-world economic fundamentals in South China Morning Post.

Sheng highlights how the AI-driven "candyfloss economy"—marked by speculative market highs, intangible asset inflation, and debt expansion—is increasingly vulnerable to physical constraints, geopolitical fragmentation, and environmental limits. Sheng argues that sustainable wealth creation requires shifting focus back toward tangible assets, physical productivity, and systemic risk management before speculative bubbles face an inevitable market correction.

Read the full article here. 

Author

Andrew Sheng

Distinguished Fellow, Asia Global Institute

Andrew Sheng

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