China's AI Token Drive Is Really About Upgrading Inland Economies

The idea of a token economy is gaining traction. The concept is still nascent, loosely defined and easy to dismiss as just another piece of artificial intelligence jargon. It is no surprise Chinese policymakers are quick to jump on the bandwagon. But in the Chinese context, there is a more concrete policy logic that deserves attention. 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.

According to official estimates, China's daily token consumption has reached 140 trillion, up from roughly 100 billion just two years earlier – a striking scale of growth. More importantly, the way China embeds the concept in policy suggests it is becoming part of the economic system it seeks to describe. This fits into a broader policy narrative.

Under the AI Plus framework, Beijing is working to embed AI across industries. At the China Development Forum last month, the National Data Administration head described tokens – the smallest computational unit in a large language model – as the "value anchor" and a "settlement unit" connecting supply and demand in the AI era. 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.