By People’s Daily reporters
This year’s government work report of China for the first time proposed creating new forms of smart economy. According to the report, China will launch new infrastructure projects on hyper-scale intelligent computing clusters and coordinated development of computing capacity and electricity supply.
These policies are expected to provide strong support and vast possibilities for the next leap forward in economic and social development.
China’s advantages become clearer when the policy directions outlined in the report are viewed alongside two recent developments.
The first concerns power equipment manufacturers in provinces such as Guangdong and Jiangsu, whose production lines are operating at full capacity. As global demand for computing power surges and countries accelerate the construction of data centers, overseas orders for Chinese power equipment have soared. This trend aligns with a popular saying in investment circles: “The end of AI is electricity.”
The second development occurred between Feb. 9 and Feb. 15 this year, when the number of tokens processed by Chinese AI models reached 4.12 trillion, surpassing U.S. AI models for the first time. Developers worldwide have discovered that running tasks on Chinese models is often far more cost-effective than using American alternatives.
The AI revolution is driving an anticipated explosive growth in global electricity demand. The global expansion in token usage essentially reflects a process where electricity is tansformed into computing power, and computing power into intelligence. In the AI era, countries that can provide lower-cost, more reliable electricity and more responsive power grids will hold a decisive cost advantage. This is why another saying has circulated online: “If the end of AI is electricity, then the end of electricity is China.”
In fact, the United States lags behind China in several foundational aspects crucial for AI development. A key constraint lies in its power infrastructure. The U.S. grid is fragmented into three largely isolated systems — the Eastern Interconnection, Western Interconnection, and Texas Interconnection. This fragmentation leads to chronic inefficiencies: surplus power cannot be readily transmitted to regions in need. Grid stability, load capacity, and infrastructure expansion are all struggling to keep pace with suring demand.
In a recent interview, Wang Jian, an academician of the Chinese Academy of Engineering, noted that if the United States wants to build new power plants, it must start with basic equipment such as transformers. “Transformer manufacturing is largely concentrated in China,” he said.
Faced with power supply constraints, some major U.S. tech companies have begun seeking their own solutions. Microsoft has resorted to build gas-turbine generators due to delays in grid connection, while Google has signed large power purchase agreements with nuclear energy companies.
If electricity shortage persist, the burden could ultimately shift to consumers. Regional grid operators in states including Michigan and Virginia have announced that electricity rates for 67 million residents in their service areas are expected to rise by 20 to 30 percent in 2026.
In an energy system driven primarily by financial returns, sustaining long-term investment is often hard to sustain. When electricity becomes scarce, prices rise until demand declines. This purely market-driven approach can produce outcomes that are unfavorable to ordinary consumers.
China has chosen a different path.
Consider one key figure: in 2025, China’s total electricity consumption exceeded 10 trillion kilowatt-hours, the largest in the world and more than double that of the United States. In July and August 2025, monthly electricity consumption each surpassed 1 trillion kilowatt-hours, setting a global record, yet there were no widespread power shortages and no price increases.
How has China achieved this?
A key factor is treating electricity as a public good and prioritizing universal access. Forty-six ultra-high-voltage (UHV) transmission projects form major corridors that carry electricity from west to east and from north to south across the country.
Meanwhile, China’s “East Data, West Computing” strategy places data centers in regions rich in renewable energy resources, allowing wind and solar power from western China to be converted into computing power and transmitted through fiber-optic networks to users across the country and around the world.
At the same time, breakthroughs in large-scale hydropower stations, advanced nuclear power units and heavy-duty gas turbines have steadily strengthened China’s power generation capacity.
What truly distinguishes China is not just individual transmission line or power plant, but a system capable of mobilizing resources to deliver major projects. In the United States, while the need to upgrade the power grid is widely recognized, market participants are often reluctant to invest in infrastructure with long payback periods.
China, by contrast, emphasizes a moderately proactive development approach. Even before power shortages arise, transmission lines and power plants are planned and built in advance to ensure future supply. The country also takes a nationwide approach to optimizing resource allocation.
Last month, the State Grid Corporation of China announced that its fixed-asset investment during the 15th Five-Year Plan period (2026-2030) is expected to reach about 4 trillion yuan ($580 billion), a 40 percent increase from the 14th Five-Year Plan period.
While others are still preoccupied with immediate electricity supply challenges, China is already acting early, laying a solid foundation for the high-quality development of its energy system and providing stronger support for the future intelligent economy.
