Beijing

The secret of Chinese AI companies to compete without Nvidia chips: electricity subsidized by Beijing

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Everywhere we look, there is artificial intelligence. Everyone talks about it, but what is its fuel? It’s not the data or the chips: it’s the electricity. While in the West technology companies are looking for how to power their data centers —increasingly energy hungry—, China has decided to take a different step. Beijing has designed an energy subsidy for its technology sector with a clear objective: to make the energy that powers the digital brains of its next generation of chips cheaper. Energy subsidy. Since September, the Chinese Government banned large national technology companies —including Alibaba, ByteDance and Tencent—acquire artificial intelligence chips from the American Nvidia, in an attempt to strengthen local production. However, the consequence was immediate: national processors consume more electricity. According to The Chosun Dailygenerating the same number of tokens with Chinese chips requires 30% to 50% more energy than with Nvidia’s H20, which sent electricity bills skyrocketing and led companies to complain to regulators. To make up for that gap, local governments introduced grants that cover up to a full year of operating costs, according to the Hong Kong media on.cc. In those provinces, industrial electricity was already 30% cheaper than in the developed coastal areas of the east, but with the new incentives the price could fall to 0.4 yuan per kilowatt-hour, a record figure for the Chinese technology industry. ¿How does the energy plan work? The scheme is relatively simple, but strategic. Local governments offer electricity discounts of up to half to data centers that use chips produced within the country. Operators that use foreign processors – such as those from Nvidia or AMD – are excluded from the program. In addition, the energy provinces receive direct support from the State to finance the discounts, with the aim of reducing dependence on technological imports and compensating for the increased consumption of local chips. According to the Financial TimesChinese data centers that rely on domestic semiconductors are, for now, less energy efficient, but the subsidy seeks to bring their costs in line with those of more advanced foreign chips. These regions—Guizhou, Gansu, and Inner Mongolia—have become hotbeds for data center clusters, thanks to their abundance of hydropower and coal. There, companies like Alibaba or Tencent are building new facilities to house their generative AI models, taking advantage of lower energy costs and tax incentives. This policy combines three strategic priorities: making energy cheaper, promoting domestic chips and reinforcing technological sovereignty. In a context of United States restrictions, each subsidized kilowatt is also a political statement. An industrial policy with a geopolitical charge. Behind the energy plan is a long-range political commitment. The Chinese Government intends for its technology companies to progressively replace imported chips with domestic processors, even if this implies higher costs in the short term. The electricity subsidy acts as a temporary bridge for national giants to adopt local chips without losing competitiveness. This measure is included in a broader national strategy of technological self-sufficiency. As the Financial Times explains in its series The State of AIChina is using its “society-wide mobilization capacity” to accelerate the development of artificial intelligence. The country already leads the number of patents and scientific publications in AI, and although the United States maintains an advantage in chips and talent, the gap narrows every year. Analyst Dan Wang, quoted by the same media, points out: “China has achieved a unique balance between engineering capacity, state control and massive industrial deployment, allowing it to advance faster than other countries in the practical application of AI.” Meanwhile, in the West… China’s decision contrasts with the energy challenges of the United States. Microsoft CEO Satya Nadella warned that the real bottleneck of AI It is no longer the chips, but the energy. In fact, he explained that many companies accumulate chips that they cannot connect due to lack of power supply. Both Microsoft and Google are already studying building modular nuclear reactors to power their future data centers, a sign of the enormous energy consumption that artificial intelligence requires. While Silicon Valley seeks electricity, China subsidizes it. This asymmetry reflects two different models: one guided by state intervention and the other by market competition. Both pursue the same goal—sustaining the artificial intelligence revolution—but with opposite philosophies. A future plugged into the State. The Chinese subsidy not only alleviates costs: it redefines the relationship between the State and the private sector in the age of AI. As analyst Arnaud Bertrand observed, US restrictions pushed China towards a different model: more efficient, more open and more collective. “By operating under hardware limitations, Chinese companies have learned to optimize resources and share open models like Qwen or DeepSeek,” wrote Bertrand on the social network That strategy, based on efficiency and diffusion, could give China a long-term advantage in global adoption, since any company in the world can download and adapt its models. The country that controls the plug. China isn’t just making the chips that power its artificial intelligence. It is also building the electrical grid that makes them possible. In a world where data is the new oil, Beijing has decided to subsidize the fuel of the digital brain. While the West debates how to connect its supercomputers, China plugs them in at a reduced price. And in this race, whoever controls the plug could end up controlling the future. Image | FreePik and FreePik Xataka | The world of AI has a problem: there is no energy for so many chips

If the war involves electromagnetic catapults, Beijing has a problem

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In mid-September there was a tense scene in China. It happened on the deck of his brand new Fujian aircraft carrierand all the hopes of his Navy were placed on the reliability of that test: If for decades takeoffs were dominated by steam, his new “monster” was going to do it with electricity. Your electromagnetic catapult confirmed They were very serious. Although now the United States has something to say. Structural limitation. The news have given two former US Navy aircraft carrier officers, who conclude, after analyze images of the Fujian, that the deck configuration of the new Chinese aircraft carrier forces takeoffs and landings to be sequenced instead of overlapping them, which reduces its operational rhythm to approximately 60% of a Nimitz no less than half a century. The explanation. As they say, the angle of support of only 6th compared to 9th of the American ships, the greater length of the landing area (which invades the area where the planes are parked in tip before the catapult) and the position of the two forward catapults intercepting the landing system convert the deck into a plane with kinetic conflict pointswhere moving a recovered aircraft can momentarily block the catapult and disrupt the next sortie. Given this risk of collisions in an extremely dense and fast environment, the only realistic mitigation, according to officialsis to lower the tempo, which is equivalent to a direct degradation of the output generation capacity. Technological leap. He FujianAs we said, it is the first Chinese aircraft carrier with electromagnetic catapultsallowing devices to be launched with more fuel and weapons, increasing radius and hit mass. In fact, only Gerald R. Ford American shares this characteristic. It is a radical leap from Liaoning and Shandongwhich continue with ski jumping and limit weight at takeoff. But the material leap does not imply an immediate doctrinal leap: the deck operational culture (cycles, sequences, discipline of human and mechanical flow under hostile climate) is only achieved through years of operation and “with a blood curve,” as veterans remember. Without that accumulated experience, hardware introduces potential capacity that practice does not yet know how to exploit without a penalty in pace (or risk). Quantitative advantage. we have told before: China launches ships at an accelerated pace, building the largest navy in the world in total numberbut its deficit in aircraft carriers is not countable but rather generational: eleven compared to two in service, and decades of know-how compared to a first cohort that is barely entering the real training phase. The Fujian is the first volumetric competitor of the Nimitzbut according to American commanders, it is born with a deck topology that compromises your cadencewhile Washington operates ten Nimitz with doctrine mature and closes the cycle with the Ford class. That the Nimitz, launched in 1975in its last deployment may still surpass Fujian in rate of departures, illustrates that distance between tonnage and competition. The “intermediate link.” The officials, furthermore, interpret the Fujian as a bridge platform: first introduce the catapult, and then clear restrictions in subsequent generations. The next unit (the Type 004) will adjust, a priori, errors and move geometries to unleash the potential that the Fujian contains but does not release due to its disposition. China already shows the industrial pattern of fix in production: fail, learn and launch an iteration in a few years, something consistent with its naval pattern in other ship classes. In that sense, it would not be entirely correct to say that the Fujian fails: rather it fulfills the function of teaching and learning so that the successor is born without those collars. From steam to electricity. Steam catapults dominated shipborne aviation since the fifties: They use steam pressure to drive a piston that drags the plane. They are huge, but energy inefficient, with control thick acceleration and high maintenance requirements. the arrival by EMALS (Electro-Magnetic Aircraft Launch System), first in the Ford class and now in Fujianreplaces thermal hydraulics with digitally controllable induction force: acceleration can be modulated, reducing the structural fatigue of the aircraft, allowing heavier devices to be launched with less stroke and recovering energy more quickly between departures. The “but”. It turns out that the electromagnetic advantage is conditional: to translate into real power requires a deck architecture, doctrine, rhythms and sequence discipline capable of capitalizing on the new margin. In other words, the first generation system in the hands of a fleet without “deck kilometers” inherits the physical power but far from the operational efficiency that decades of steam they taught to squeeze. The key is time. Ultimately, the background thesis of the veteran Marines is not that the Fujian is an unsolvable error, but that its limitation reveals the real nature of naval aviation warfare: it is not pure engineering but engineering amortized with habit, and where the enemy is not design but the chronology. Although it may seem like it, the combat power of an aircraft carrier is not its displacement or its systems, but rather the cycles per hour and the psychological confidence accumulated to sustain them at night, under storms, with low fuel and/or zero margin. That casuistry, which defines lethal performance, cannot be bought. AND, according to officialsChina still operates in the stadium in which only through years of cover will it be able to convert the physical leap from Fujian in sustained air power output. Image | Ministry of National Defense The People’s Republic of China/ LI GANG/XINHUA, Ministry of National Defense In Xataka | China has just tested the Fujian with three different aircraft. The electromagnetic catapult is no longer theory, it is practice In Xataka | For years the Airbus A380 symbolized European power against Boeing. Today he survives like a colossus without a kingdom

Russia is trying to conquer the Chinese pig market. Beijing has just provided it with rates of up to 62% to the EU

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Beijing has decided to strengthen its pressure on the European pig sector in an evening retaliation to The rates applied By Brussels to the electric cars ‘Made in China’. And plan to do it big, adding tariffs of up to 62.4% to EU meat exports. In Spain the employer already He has nuanced That their companies will pay only 20% (some less), but if there is a country that can look with satisfaction, China’s decision is not Spain, but Russia. After all, Moscow has been wanting to win Market share in Asia. What happened? That the European pig has started September with turbulence. Turbulence that also affect one of its large markets: China. On Friday the Ministry of Commerce of the Asian Giant advertisement that since Wednesday will impose provisional tariffs of up to 62.4% To a series of pig products and by -products, a whole malazo for the community sector, which every year sells in China thousands and thousands of tons of pork. According to the Pig333 specialized platform, only during the first quarter of 2025 the EU exported more than 1.1 million tons to countries located outside the community club. Among the nations that contributed the most to that figure are Spain, with 35% of exports, followed by Netherlands, Denmark and Poland. At the other end of the chain, the fate of the meat is China, which was made with 296,500 tons, almost 27% of the total. It is followed by the United Kingdom and the Philippines. What does that rate of 62.4%mean? The figure is overwhelming, but Beijing’s tariff policy will not affect all EU countries equally. In an interporp fact, the agri -food interprofessional organization of the white -layer Portio, stands out that the Spanish industry will be the best standing in Europe. Although the rate will effectively reach 62.4% for the company of other countries in the region, the employer clarifies that for local firms that penalty will be quite lower: 20%or even lower in some specific case. And what is the reason? EFE Precise That the largest tariffs, up to 62.4%, will apply to companies that do not collaborate with Chinese authorities. Those who do will see how that low rate at 20%, the percentage that the well, Noel, Campofrío, Cárnicas Five Villas, Fiselva or Sánchez Romero Cavajal must face. The general photo is however more complex: China plans to do certain exceptions with the companies that his delegation has taken by way of sample for his investigation. Among them are the Dutch Vion, which will face a tariff of 32.7%; Danish Danish Crown, who will assume a rate of 31.3%; and the Spanish Litera Meat, based in Huesca, the most favored with 15.6%. Why those rates? Largely for the automotive. Perhaps the meat and automobile industry do not have much to do, but if we talk about economic policy, commercial flow and tariffs things change. When Brussels decided Upload your rates To the electric cars ‘Made in China’, Beijing reacted pointing to one of the European sectors that depends most on the Asian giant, the pig. As? The Xi Jinping government began an investigation ‘Antidumping’ Focused on EU’s pig imports, a process with which, China alleges wants to avoid the alleged unfair competition that affects its own companies. These investigations began in 2024, but In June Beijing decided to expand the investigation until at least mid -December. Once the process ends, the government will announce the permanent tariffs, but until then it has opted for temporary rates. As remember The Ministry of Commerce, its preliminary study identified a case of dumping Related to pork from the EU, which would have caused “important damage” to Chinese companies. Is it so serious? It is no accident that Beijing has set just in that sector. China is a Important producer of pigs, but also a enormous gigantic market that matters every year hundreds of thousands of tons of meat, a flow that generates in turn thousands of millions of dollars. And that market the EU (and especially countries with broad livestock cabins, such as Spain) plays a key role. Despite having slightly reduced its purchases, in 2024 the Asian giant remained the main destination of community pork, with a flow of 1.12 million of tons. In 2020, when the sector of the country was affected by the African swine plague, that data came to 3.34 million. In the specific case of Spain, which together with Germany and France plays A fundamental role In the European pig industry, the figures are equally eloquent. “China is the main destination market for the meat and by -products of the Spanish pig. In 2024 exports to this country reached 540,000 t, with a value greater than 1,097 million euros, which represents almost 20% of the total exported volume and 12.5% ​​of the value of sales,” remember Interporc. Is it bad for everyone? No. There is a country that probably see with expectation commercial tensions between China and Europe, especially if we talk about the pig sector: Russia. Moscow was set out from the appetizing (and millionaire) Chinese market for about A decade and a half Due to the health restrictions applied by Beijing in 2008 to protect from the African pig plague. That veto was broken in March 2024, when Russia managed to send a first game of 27 tons of pig to the Asian giant. It was a modest amount, true, but a success for Russia, which had been trying to open a hole in the Chinese market for years. Last July, Russian pork exports to China already reached 12.4 million dollars, According to Echemiwhich ensures that this figure represents a 22% increase compared to June. It is not the only sign that Moscow is managing to recover land in the Asian market. Just a few days ago the Intefax agency revealed That Kremlin expects Beijing to increase the number of Russian companies authorized to export meat to China, a possibility that looks with optimism. “We are communicating … Read more

To US controls are now joined by the Beijing himself, and point to his star chip

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Nvidia has been dealing with the export controls that restrict the sending of their most advanced chips to China. But now, the company directed by Jensen Huang faces a double pressure: while trying to dodge Washington’s measures, it must also face new barriers imposed by Beijing, which threaten to further reduce their margin of maneuver in one of its key markets. A growing threat. As we said, the challenges for Nvidia are not new. In 2022, Joe Biden administration prohibited export of his chips A100 and H100specifically designed for artificial intelligence tasks. The company then warned that the measure could be up to 400 million dollars in sales losses in China. The answer soon: he decided to move. Thus, Nvidia designed a product designed exclusively to keep present in the Chinese market. To achieve this, he had no choice but to reduce the capacities of his chips and adapt them to regulatory demands. From there the A800 and H800 were born, cut versions of their star models. For a time they managed to be marketed in China, but a second round of controls ended up leaving them out of play. The H20 also wobbles. Once again, the team led by Jensen Huang got down to work to develop a chip adapted to the Chinese market. The result was the H20a cut version in front of its equivalents in the West, but raised as its great bet for China. Sales forecasts in 2024 exceeded one million units. However, obstacles have not taken long to appear. Now the pressures come from Beijing. Last year, the Chinese government began to recommend to local businesses to acquire NVIDIA GPUS. In full global career for artificial intelligence, the measure seemed contradictory. But the context explains it: just then, several Chinese manufacturers were finalizing their own alternatives to reinforce the country’s computation capacity without depending on foreign technology. Huawei has not stayed with crossed hands. The company has opted strong with products such as the Ascend 910C, a chip that, as points out Tom’s hardwarereaches inference to inference about 60% of the NVIDIA H100 yield. In addition, it is optimized for large language models and has already begun to be adopted by Chinese giants such as Baidu or Bytedance. Huawei also has other variants, such as the Ascend 910b. But there is more. In the middle of last year, The Chinese government presented an action plan to boost the “ecological development of data centers.” The objective was clear: to improve its energy efficiency. To measure the advances, the authorities chose a metric known as Pue (Power Usage Effectiveness)which relates the total energy consumption of the center – including air conditioning, lighting and other auxiliary systems – with the energy used exclusively by IT equipment, such as servers, networks or GPU. The objective of the plan was to reduce the can of the data centers below 1.5 by 2025. It should be remembered that the more the Pue can the value 1, the more efficient the data center is. One of the keys to achieve this goes to use more efficient graphics cards, which generate less heat and, therefore, reduce the energy consumption of the cooling system. The problem, As the Financial Times points outis that H20 chips do not finish fit in this equation. According to the aforementioned newspaper, the National Development and Reform Commission is urging local companies to use only chips that meet demanding energy efficiency standards, both in new data centers and in extending of the existing ones. In practice, this translates into increasing pressure on Chinese technology to reduce – or directly abandon – their GPUS dependency manufactured in the United States. For now, the regulations do not apply strictly, but everything indicates that that could change. In the horizon a possible hardening of control appears: inspections in situ, economic sanctions and harder requirements. If that scenario materializes, Nvidia could be seen before an even greater blow in which, until now, it is its second most relevant market: China represents 13% of its global sales, with more than 17,000 million dollars in annual income. Images | ABODI VESAKARAN | Nvidia In Xataka | The US suspects that Nvidia chips are arriving in China through a third surprising country: Malaysia

South Korea has found a great structure in the waters that is disputed with China. It is the second time, and Beijing does not deny it

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The conflict It began in the months of April and May 2024. In front of its coasts, in The yellow seaSouth Korea sighted a series of floating structures in the space that delimits the nation with China. From Beijing it was tried to reassure the neighbor explaining that what they saw only had fishing connotations, but no one escaped then that behind the movement could exist much more. New structures have turned on the spirits in Korea. A new dispute zone. As we said, a few weeks ago China began The construction of maritime infrastructure in the yellow seaa strategically crucial area between the Chinese Costa and the Korean Peninsula. The new facilities, A floating steel structure of more than 50 meters high and widewere detected by South Korean satellites, raising concerns that China is using the tactics of consolidating territorial claims through permanent constructions. With An area of ​​417,000 square kilometers, the yellow sea is rich in marine resources, oil and gaswhich makes it a key point of economic and geopolitical interest for both nations. Until now, South Korea has protested by the installation of Several structures since 2024claiming that these could be part of a major plan in China to exercise sovereignty over the area. In fact, the South Korean authorities believe that Beijing could build up to 12 of these structures, which would turn the area into a friction point into the already tense relations between both countries. China and its maritime tactics. The strategy of building permanent structures to affirm sovereignty is not new in Chinese politics. Moreover, Beijing has applied similar tactics in the South China Seawhere has transformed reefs into military bases And he has claimed jurisdiction on disputed waters with the Philippines, Vietnam, Malaysia and other countries. Everything indicates that the strategy seems to spread to the yellow sea, with direct implications for South Korea and its allies (Particularly, the United States). What does China say. We said it at the beginning. Chinese officials They have tried to minimize controversyalways describing these facilities as “fishing support infrastructures”but the South Korean security community fears that they are advanced for an eventual statement of Chinese sovereignty. In the words of Sang Hun Seokformer South Korean Diplomatic and Security Analyst, “these facilities act as the maritime equivalent of boots on the ground, establishing a physical presence that China will then use to consolidate their claims.” The provisional measures zone. The truth is that the yellow sea has been a historical dispute area between China and South Korea. In 2001, Both countries established the one known as the provisional measures zone (PMZ) to administer the area of ​​exclusive economic zones (ZEE) and avoid confrontations, delimiting fishing rights and prohibiting new constructions or the exploitation of resources until reaching a permanent agreement. Under it, the two nations are prohibited from building infrastructure or exploiting resources beyond fishing if the other does not agree. What happens? What South Korea He has repeatedly denounced for years that China has ignored these restrictionsallowing their fishermen to operate illegally in the South Korean Zee. Said dispute has even led to violent clasheswith South Korean maritime patrols shooting against Chinese vessels on more than one occasion. Hence, the construction of permanent structures is now seen as a new level of provocation, as it could sit a precedent that Weakens the capacity of South Korea to assert your maritime rights. The elephant in the room: USA. He Mutual Defense Pact between South Korea and the United States makes this dispute just a bilateral issue. With 28,000 American soldiers parked in South Koreaany Chinese movement that alters the strategic balance in the region could attract Washington’s attention. Until now, Americans have maintained a containment approach against Chinese expansion in the Indo-Pacific, particularly in the South China Sea and the Taiwan Strait, but but The yellow sea could become a new piece on the game board. Dispute with historical roots. From the Chinese perspective, Yellow Sea control has a strategic and symbolic weight. The reason? In the last 200 years, The great battles that defined the history of China were fought in this regionfrom the Opium wars until The Sino-Japanese war. Under this perspective, Beijing’s official narrative considers these wars as a historical humiliation imposed by foreign powers, and recovering absolute control over its coast is seen as part of the restoration of his “historical law”. The Chinese argument to reject an equitable division of the ZEE with South Korea is based on the fact that Its population and their coast are significantly largerso they believe that the dividing line should favor them. On the other sidewalk, South Korea and its allies defend the principle of the “midpoint”, according to which the maritime border should be drawn equally between both countries. And where do it leads to us? It is the big question. Of course, so far the dispute has not reached the seriousness of the Conflict in the South China Sea or the Eastern China Sea, where the Asian nation maintains confrontations with the Philippines and Japan respectivelybut the situation could quickly intensify if Beijing continues to expand its presence. It would not really be “so much.” If South Korea, with the support of the United States, decides to directly challenge these constructions, we could see a new front of tensions in the Indo-Pacific. Perhaps for this reason, at this time the great unknown is to know how far South Korea will allow (and its alliance with the United States) that Chinese tactics advance before taking more forceful measures. Image | Grid-AendalNASA In Xataka | The US and China Liby ‘Chips War’. Now South Korea prepares for ‘The War of Memoirs’ In Xataka | China has discovered an advantage to win the career career to the US: a “bubble” in its defense

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