China’s AI token drive is really about upgrading inland economies
Export of tokens not only embeds China’s energy advantage into global AI systems, it pulls the value chain deeper into the country’s interior
It reflects an emerging attempt to reframe how energy, infrastructure and digital services interact, and in doing so, how China positions itself in the next phase of the global AI competition.
But the push is closely tied to the long-standing ambition of regional economic rebalancing. For decades, China’s western regions have functioned primarily as energy suppliers to the more industrialised east. Coal, hydropower, wind and solar power, all sent over long distances at very low margins. The token economy is an effort to upgrade these inland regions.
The economics are straightforward. Electricity accounts for more than half the costs in data centre operations. Western China benefits from structurally lower power costs due to its abundant resources. So when that electricity is converted into computing power and then into AI services, the resulting output can command significantly higher prices than the energy input.