China has a two tier energy system.

Consumer get the cheaper energy, while industry normally get the twice as expensive energy.

But for AI/Datacenters, there is a exception and they get the cheaper consumer level energy.

You need to take in account that the way China taxes is not the same as here in the West. And a lot more is put on the local governments regarding generating their own revenue (why there was so much building in China because those projects funded local government). A bit of a side topic lol. Its not so simple as they are making a loss on something because how its structured.

AI gets the cheaper tariffs then the rest of the industry, that is a fact. They simply have less energy profits on the AI energy. Now if you consider that subsidized or not, ... in both cases China is still making a profit.

What is overlooked is the massive amount of energy generation that China has and still keeps expanding. And that is a direct reflection upon why the prices for industry and consumers are so cheap. This buildout ironically had nothing to do with AI but was more about lower energy = cheaper industry production ... and a lot of buildout was also to build more independence from energy imports. They are not just throwing solar and wind turbines around like candy, the amount of reactors constructed and still under construction, ...

> China currently has 36 to 38 nuclear reactors under construction, maintaining the largest nuclear buildout in the world and accounting for roughly half of all global nuclear plant construction

So yea ... The AI in the west have a issue because it really does not matter if you cut China from Nvidia GPUs or advanced nodes, they compensate on the power level.

Edit: And a little extra, the irony is here in the West building nuclear is expensive as hell because we barely do one or two at the time. With a lot of lost expertise. China doing tons of them non-stop cuts down on the costs a lot.

China generates a lot of electricity but from what I understand prices aren't that much different to in the USA because of grid constraints.

At similar prices and 1/4th or whatever the average salary, meaning the average person has to use a lot less energy, or spend a larger % of their budget on it

I'm not sure how much you pay in USA. But I live in Beijing, where the residential electricity price is about 0.5 RMB per kWh, roughly 0.0749 USD.

China's electricity pricing involves cross-subsidies. Residential and agricultural users pay the lowest rates, which are generally below the cost of supply. Commercial and industrial users pay more and contribute the most of grid revenue.

Prices vary by region: commercial electricity can approach 1 RMB (0.15USD) in Beijing, but the national average is about 0.67 RMB (0.1USD), while industrial electricity averages around 0.63 RMB nationally.

And that half a RMB doesn't include extra fees or delivery rates vs supply rates, correct? It's the all in rate?

I'm not quite sure what you mean by "extra fees or delivery rates," but this is the total amount I pay for electricity, no additional charges.

In my state in the US, they started differentiating between a "supply" rate, as in who generated your electricity, versus a "delivery" rate, or who delivered the electricity. That way they can market the supply rates to you and charge you on delivery additionally.

Supply rates can adjust dynamically but not delivery, though delivery rates have been creeping upwards as well.

>Consumer get the cheaper energy, while industry normally get the twice as expensive energy.

Interesting. In Germany, industry gets the cheaper electricity...

It's not particularly surprising. China wants people to use electricity. Germany wants people to use gas/oil. The rate of electrification in respective country reflects that preference.

I don't think that the steering effect (away from electricity) on private people is intended. It's intended to keep industry in the country. Makes sense, but still, it feels unfair as a private person.

> China currently has 36 to 38 nuclear reactors under construction

Wowza! Thanks for all the info really helpful to have insights into how it all works.

Sales tax in China is attributed to the place of production rather than the place of sale, which is why provinces want to produce as much as possible

as if electricity for openai & anthropic isn't heavily subsidised

as if electricity for spacex wasn't literally illegally installed gas turbines polluting the air