What the U.S. Fears: Not China’s Chips, but Its Renewable and Low-Cost Power
Over 1 billion kilowatts — this is the latest data on China’s renewable energy installed capacity for 2024, ranking first in the world, far ahead of others…
Think about what this means. To put it bluntly, China’s wind, solar, and hydropower combined can leverage the entire global industrial chain.
In the U.S., they keep shouting about restricting our chips and AI, but what they really fear may not be these superficial high technologies, but the electricity beneath our feet —China’s increasingly abundant, cheaper, and more ‘green’ electricity.
01China’s Low-Cost Electricity Has Become a New Industrial Ace
Let’s throw out a statistic — in 2023, China’s total electricity consumption reached 9.2 trillion kilowatt-hours, with industrial and commercial electricity prices 30% to even 50% cheaper than those in the U.S. and Europe.
In some industrial parks near hydropower stations in the southwest, electricity prices are so low that it makes one question reality.
How is this achieved? It’s simple: wind, solar, and water are integrated, resources are abundant, scales are massive, costs are diluted, and crucially, China’s grid scheduling capability is strong.
At this point, for high-energy-consuming industries like chips and AI, who can afford rising electricity costs?
Many AI companies in Silicon Valley are already being pressured by the issue of ‘affording electricity’ in 2024…
When it comes to making chips and producing AI servers, in the end, it all boils down to electricity prices.Whoever has cheaper electricity and can support large-scale computing centers will be able to engage in AI and high-end manufacturing.
Clearly, currently, the only country capable of doing this globally is China.
The U.S. is not afraid of how many high-end chips we can produce overnight, but rather that China can use low electricity prices to bring all industries in, sustain them, and drive them!
02Chips Are Just the Surface; Electricity Is the Underlying Logic
Looking back, the U.S. has spent heavily on various chip bills and subsidy programs in recent years, butwhen TSMC built a chip factory in the U.S., they couldn’t even supply enough electricity, causing delays and skyrocketing costs.
To put it bluntly, this is not a technical issue; it’s a problem with the underlying energy structure.
In fact, what the U.S. fears most is that China will raise the manufacturing upgrade threshold even higher with renewable energy.
In the past, it was about labor and efficiency; now it’s about electricity prices and green metrics.
As long as China has enough cheap electricity, AI, semiconductors, and data center industries can remain in China, even attracting global capital to flow back in.
Speaking of which, think about why Europe and the U.S. have recently started various ‘anti-dumping’ investigations against China’s new energy vehicles, photovoltaics, and lithium batteries, claiming ‘overcapacity’,
the real fear is that China’s cheap electricity will completely crush their industrial chain competitiveness — this issue… is really not something that can be resolved with a simple ‘chip sanction’.
03The ‘Geopolitical Weaponization’ of Electricity, the U.S. Is Also Anxious
So the question arises, how expensive is electricity in the U.S.? Taking Texas and California as examples, in the summer of 2024, electricity prices for residents in many areas could reach $0.30 per kilowatt-hour,
with a low proportion of renewable energy, high transmission costs, and extreme weather leading to widespread power outages and price hikes,while in China’s western regions, industrial electricity prices are even below $0.05 per kilowatt-hour, this difference is outrageous.
In recent years, the U.S. has wanted to bring manufacturing back home, but high electricity prices have deterred many companies, factories don’t want to move, but the numbers just don’t add up.
Moreover, the U.S.’s renewable energy layout is far behind that of China, with aging infrastructure and slow upgrades. Trying to turn the tide with ‘green subsidies’? Honestly, the difficulty is akin to climbing a mountain.
Americans may not admit it, but deep down they know that electricity is the lifeblood of modern industry; whoever controls cheap, stable, and clean electricity will have the qualification to lead the next technological cycle.
That’s why they impose various restrictions on China’s new energy exports, even trying to set barriers for AI computing centers.
04The ‘Spillover Effect’ of China’s Electricity Is the Real Anxiety for the U.S.
To be honest, what the U.S. fears most now is not that China can manage its internal circulation, but that China’s low-cost electricity is starting to drive the global industrial chain.
For example, some countries in Southeast Asia and Africa have adopted China’s green equipment and technology, leading to a drop in their electricity prices,and in the future, even Apple and Tesla will have to consider whether to completely move their factories out of the U.S..
To put it bluntly, in the future, industries like AI, computing power, and cloud computing will ultimately compete for resources with China’s western wind, solar, and water stations,
whoever secures China’s low-cost electricity will be able to support the global technological infrastructure… this thought is clear to everyone.
Friends, in the future, China’s ‘export’ capability of electricity may even be regarded as a strategic weapon, just like oil, and this is the fact that the U.S. is most unwilling to face!
In short,whoever can continuously supply low-cost, renewable electricity will be able to firmly grasp the initiative of the global industrial chain.
How to put it… the U.S. is still entangled in chip bans, while we are actually playing a much bigger game.
Therefore, the real anxiety for the U.S. is not that China is ‘bottoming out’ in technology, but that China is using electricity to raise the industrial chain threshold to a level they can never reach!
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