1 Decoding the strategic implications of China’s 140 trillion-plus average daily token usage
At a State Council Information Office press conference on March 24, PRC National Data Administration head Liu Liehong said that China’s average daily token usage had exceeded 140 trillion. He added that this represents an increase of over 1,000 times compared to 100 billion tokens at the beginning of 2024, as well as a further growth of over 40 percent within a span of three months compared to 100 trillion tokens at the end of 2025.
Liu said that the competitiveness of China’s artificial intelligence industry is strengthening significantly, and the recent focus on “token exports” (i.e. Chinese large language model providers selling their API services to international developers and enterprises) is a clear sign of this rising competitiveness.
Liu added that China had built more than 100,000 high-quality datasets as of 2025 with a total volume exceeding 890 petabytes, or roughly 310 times the total digital resources of the National Library of China. Liu said that the National Data Administration will continue to promote innovation and development in artificial intelligence going forward, coordinating efforts to implement a new round of data set construction initiatives.
Our take
1. At a glance, the Chinese AI industry’s over 140 trillion average daily token usage suggests that the PRC has progressed from being a “technology follower” to a “leader in large-scale application.” The figure also suggests that the CCP’s global AI competition strategy is making gains and AI is becoming a core tool to advance its external expansion.
The PRC appears to have achieved whole-society penetration of AI applications even as U.S. model developers are pursuing the intelligence limits of individual models:
- March 2026 data from global API aggregation platform OpenRouter shows that Chinese models reached 7.359 trillion weekly token calls, a 57 percent surge from the previous week. In contrast, U.S. models recorded only 3.536 trillion calls and showed a declining trend.
- Five of the top nine models on OpenRouter by usage are Chinese models. The top three have long been dominated by Xiaomi’s MiMo-V2-Pro (Hunter Alpha), StepFun’s Step 3.5 Flash, and MiniMax’s M2.5.
- Chinese AI is shifting from chat-based interaction to task execution. A complex coding or industrial analysis task can consume between 220,000 and 950,000 tokens. This high-intensity “automated loop” is the underlying driver behind the thousand-fold growth in token usage.
Meanwhile, China’s AI industry has reduced costs to about 5 percent of its U.S. counterparts through extreme architectural innovation:
- The output cost of Claude 4.6 Sonnet in the U.S. is $15 per million tokens, while China’s MiniMax M2.5 costs only $1.1, a 13.6-fold price difference.
- The leading U.S. AI coding tool Cursor (valued at nearly $30 billion) has acknowledged that its Composer 2 model is fine-tuned from Chinese AI company Moonshot AI’s open-source model Kimi K2.5. Statistics suggest that around 16 percent to 24 percent of AI startups in the U.S. have integrated Chinese open-source models into their tech stacks.
2. China’s 140 trillion average daily token calls is not the result of pure market competition, but rather the product of Beijing’s strong policy-driven approach (so-called “state-led market creation” and “compute-energy subsidies,” or similar to policies for the semiconductor and electric vehicle industries).
First, Beijing has created the world’s largest application market for domestic firms through administrative measures.
- In October 2025, the Cyberspace Administration of China and the National Development and Reform Commission jointly issued guidelines on deploying large AI models in government sectors, specifying 13 typical applications across four major scenarios such as public services and administrative operations, requiring coordinated deployment at all levels of government.
- The CCP authorities are also using AI to address bureaucratic inefficiency and corruption. For instance, Hangzhou Xixi Hospital deployed an “intelligent integrity supervision platform,” claiming zero corruption-risk incidents in the second half of 2025. Cities such as Harbin and Daqing have also rolled out AI-powered supervision systems for public complaints and oversight tasks.
- Beijing has set a target of 90 percent AI adoption across industries by 2030 in the 15th Five-Year Plan, prioritizing “high-quality development” of AI. Also, Beijing increased the technology budget by 10 percent to 426.4 billion yuan. On a related note, the Beijing municipal statistical communiqué released on March 26, 2025 showed that information transmission, software services, finance, and high-tech manufacturing together contributed over 80 percent of the city’s GDP growth.
Second, the CCP authorities have provided substantial subsidies and cheap energy to support the AI industry.
- In July 2025, Shanghai introduced policies allocating 1 billion yuan in subsidies covering up to 80 percent of AI leasing costs. Earlier, Shenzhen launched a fiscal program of up to 4.5 billion yuan (about $630 million) to support AI and robotics industries in February 2025.
- The “East Data, West Computing” (東數西算) project converts cheap electricity from Western China into computing power. Mainland media reports that western green energy costs about 0.3 yuan per kWh, compared to 0.5 yuan in the east. This price gap allows domestic model token costs to be only one-sixth to one-twentieth of international competitors. By February 2026, Chinese models (with models such as MiniMax and Kimi) accounted for 51 percent of token usage among the global top ten for the first time — surpassing the United States. The value generated per kilowatt-hour of electricity in token output can reach 11 yuan, representing a 22-fold value increase.
3. Beijing’s inclusion of “compute–electricity coordination” (算電協同) in its 2026 government work report marks the elevation of deep integration between computing power and electricity to a national strategy for the first time. The tokenization of electricity — through the chain of “converting green energy into computing power, and computing power into intelligence” — is reshaping the global AI energy competition landscape, becoming a core tool for the CCP’s push to restructure the global order and counterbalancing the U.S.-led system.
The PRC is leveraging its overwhelming advantage in power supply to achieve so-called “overtaking [the U.S.] on a different track.” In 2024, China added 543 GW of new power capacity, exceeding the total historical scale of the entire U.S. power system. In contrast, the average wait time to secure a grid connection in America now exceeds eight years, with a projected shortfall of 44 GW. The packaging of surplus electricity into “tokens” via AI models for export allows the PRC to effectively export highly concentrated energy value.
Meanwhile, Beijing’s 2023 “Global AI Governance Initiative” emphasizes “sovereign equality” and opposes defining AI through Western democratic values, an approach that is highly attractive to authoritarian states. At present, the PRC has conducted 59 targeted training programs for officials from Central Asia, primarily focused on exporting governance and security models based on Chinese technologies. Beijing is also deploying a “Star-Compute” satellite network of 2,800 satellites, aiming to provide global orbital computing services by 2035 and challenge the infrastructure advantage of SpaceX’s Starlink.
4. China’s impressive AI push is not without deep structural contradictions. For one, Beijing’s control over AI reflects the CCP regime’s extreme sensitivity to the potential of technology to undermine its rule. An example is Beijing’s support and restriction of the open-source agent OpenClaw. On the one hand, the CCP authorities rolled out subsidies in March 2026 for private enterprises to use OpenClaw. On the other hand, it strictly prohibited state-owned enterprises, government agencies, state banks, and the military from using OpenClaw in internal systems. Beijing’s moves adhere to the CCP’s typical mindset of “capturing benefits while preventing loss of control.”
Leading Chinese AI firms are still incurring massive losses. For example, MiniMax saw its revenue grow sevenfold to $70 million in 2025, yet its net loss expanded to $1.87 billion. This indicates that “token exports” remain highly subsidy-driven and face sustainability challenges amid fiscal pressures tied to the real estate downturn.
Beyond energy advantages, limitations in domestically produced AI chips constrain China’s AI development ceiling. For instance, although Huawei’s Ascend 910C targets an annual production capacity of 600,000 units in 2026, its single-chip performance is only between 60 percent to 70 percent of Nvidia H100. Reliance on cluster-based strategies (utilizing more chips to compensate for weaker ones) creates significant pressure in terms of energy efficiency and maintenance costs.
5. China’s 140 trillion daily token calls represent a strategic outcome of the combination of state capitalism and so-called “electronic advantage.” By forcefully promoting applications through administrative measures and monetizing electricity globally via energy advantages, Beijing is attempting to construct a parallel ecosystem under its leadership.
The future of this model, however, depends on whether it can generate “original innovation” under tight authoritarian control, rather than merely producing “industrialized outputs of cheap computing power.” China’s average daily token usage is likely to surge going forward, but it is questionable whether this represents the establishment of a foundation for industrial upgrading or yet another case of “digital overcapacity” under state capitalism. This uncertainty is likely to be one of the most significant variables shaping the global technological and geopolitical landscape over the next two years.
2 CCP looks to exploit global crises to win over the Global South
The 2026 edition of the Global South Financiers Forum, an annual high-level international financial conference organized by Xinhua News Agency, was held in Beijing from March 25 to March 26. Representatives from government departments, financial institutions, enterprises, media, and international organizations from more than 30 countries and regions attended the event.
The forum discussed the following central topics:
- Targeted credit delivery: China’s banking sector is providing market-oriented and diversified financing support for infrastructure and green transition projects in countries such as Malaysia, Uzbekistan, and Brazil.
- De-dollarization and local currency settlement: Discussions focused on establishing more independent payment systems among Global South countries to mitigate the risks of financial sanctions arising from geopolitical conflicts.
- Developing new productive forces: The forum emphasized shifting capital market support toward technological innovation, particularly under the guidance of the 15th Five-Year Plan outline, as well as strengthening the role of enterprises as key drivers of innovation.
Fu Hua, president of Xinhua, said at the forum that the state media would work to deepen financial cooperation among Global South countries and contribute a “Global South solution” to building a new global financial governance order.
Yang Dongning, vice president of the Export-Import Bank of China, said in a keynote speech that green development is the defining foundation of high-quality growth for Global South countries. He added that Chinese entrepreneurs and financiers, through long-term practice, have developed a series of new methods and models that address environmental challenges, create economic value, and improve people’s well-being. These models and methods offer Chinese wisdom and solutions for sustainable development in the Global South, Yang said.
Backdrop
The United States and Israel jointly launched military operations against Iran at the end of February 2026. The conflict resulted in the partial closure of the Strait of Hormuz, which in turn severely impacted global supply chains for key commodities such as energy and fertilizer.
Meanwhile, the Ukraine-Russia war has entered its fourth year with no immediate signs of cessation and with U.S. diplomatic efforts making negligible progress towards concluding the conflict.
Our take
1. Beijing is attempting to transform its domestic industrial overcapacity and technological standards into a form of globally influential governance framework through initiatives such as the 2026 Global South Financiers Forum and the newly launched 15th Five-Year Plan. At its core, this expansion is a systematic effort by the CCP to alleviate internal economic pressures while constructing a “China-style ecosystem” in Global South countries through financial tools and technological standards.
The CCP appears to be taking advantage of a strategic window to accelerate its expansion into the Global South and intensify diplomatic outreach (including the promotion of its “multipoplarism” narrative) in general as the major Western powers become deeply entangled in conflicts in the Middle East and in Ukraine. By framing the Western-led order as adhering to the “law of the jungle” and revisionism while promoting its Global Development Initiative and other diplomatic narratives, Beijing is looking to entice Global South countries and other nations that are becoming Western-skeptical to rely more on the PRC.
For instance, the crisis over the Strait of Hormuz, including Iran reportedly considering allowing limited oil tanker passage if cargo is traded in yuan instead of US dollars, provides an opportunity for Beijing to leverage to reframe “energy security” into “new energy infrastructure cooperation” with the Global South and other nations. As those countries increasingly adopt Chinese “green” technologies and standards, the PRC will replace existing Western technological pathways in regions such as Latin America and Central Asia. Growing global dependence on China will improve the CCP’s position in great power competition, while simultaneously eroding the U.S. advantage.
2. The 2026 Global South Financiers Forum demonstrates how Beijing is using financial instruments to address its severe domestic overcapacity problem while exporting Chinese standards. For instance, Export-Import Bank of China vice president Yang Dongning revealed at the forum that the bank focuses on leveraging China’s industrial advantages to support photovoltaic power projects in African countries. This not only drives the export of Chinese solar modules, inverters, and engineering equipment, but also introduces China’s full-chain technical standards — from design and construction to commissioning and operation — into international markets.
Beijing also emphasized at the forum that the key to resolving bottlenecks in capital flows across the Global South lies in mutual recognition of standards. This is not merely about technical alignment, but about establishing an independent financial discourse system —separate from traditional Western frameworks — by promoting China’s green finance taxonomy, carbon accounting methods, and credit rating systems. When Global South countries adopt these “China standards” in energy transition and infrastructure development, they can more easily access low-cost financing from the PRC. This creates an export pathway characterized by “standards first, finance follows, and industrial integration thereafter.”
3. Beijing’s effort at building a non-Western financial “moat” for Global South nations through the Global South Financiers Forum and other initiatives is not without troubles or repercussions for the PRC.
A worsening global economic downturn has the potential to cause headaches for Beijing. The U.S.-Iran war has pushed global economic growth forecasts down to 4.5 percent. Against the backdrop of generally declining repayment capacity among Global South countries, the “diversified financing” promoted by China’s banking sector may lead to a surge in overseas credit risks for Chinese banks. When recipient countries are unable to repay their debts, the PRC’s hardline debt collection practices could trigger anti-China sentiment locally, as well as undermine Beijing’s narrative of “peaceful development.”
4. The PRC’s Global South strategy is not simply about mutually beneficial cooperation as its propaganda claims. Rather, the strategy is a systemic project driven by Beijing’s need to relieve domestic pressures and pursue geopolitical hedging. The CCP is attempting to exploit the crisis in the Western-led rules-based international order to fill global governance vacuums. Also, the CCP is looking to convert excess industrial capacity into long-term debt and technological dependence in Global South countries through initiatives such as “new quality productive forces” and “targeted credit delivery.” Furthermore, Beijing is seeking to reshape the underlying rules of global finance and technology through AI standards and green certification systems. In sum, the so-called “Global South solution” touted by Beijing is essentially a new dependency system centered around getting countries “hooked” on Chinese technology and bound together by renminbi-denominated debt.
The CCP’s moves could enhance the PRC’s global influence in the short term. However, Beijing’s reliance on state-driven administrative power rather than organic market forces could expose the regime to structural resistance and political risks in Global South markets in the long run.
