You could say the same of human intelligence and competence and social trust.

I think it's a mistake to stop producing those things.

Fair point, but you dont produce intelligence, competence and social trust. Essentially a society earns it.

Is the reason that competence and social trust are declining because of AI? Maybe, but not only that.

Uh yes you could but what's your point. If we make ourselves dumber, it doesn't make China dumber, human intelligence will just leave us behind.