Token Economy, Already at the Beginning of Its End — Realpolitik in Tech by Maggie Xiao<br>×<br>No results found.
中文
China Telecom recently established a Token Office (词元办公室), reportedly the first of its kind among Chinese state-owned enterprises. It's fair to say tokens are now a strategic asset.
At first glance, this looks like the beginning of a new era, but I think we are already at the beginning of its end.
The token economy is a transitional phase, not a destination.
To understand why, we need to begin somewhere seemingly unrelated: geopolitical chokepoints.
01. The New Chokepoints
Every civilization organizes itself around geographic bottlenecks: the chokepoints.
The British Empire understood maritime chokepoints better than anyone. The United States inherited much of that strategic architecture postwar.
A chokepoint is a narrow passage: straits, canals, sometimes mountain passes.
Here are a famous few.
Malacca, the strait between Malaysia and Indonesia, through which roughly 80% of China's imported oil still flows. Also called the Malacca Dilemma.
Then there are the Suez Canal, the recently storied Panama Canal, the Strait of Hormuz and dozens of lesser-known mountain passes, pipelines and maritime corridors.
The map of chokepoints largely defines today's global trade, macro and geopolitical orders. But that map is becoming obsolete.
Different Maps Being Drawn
In South America.
Chancay, for example, a new port in Peru, can send Brazilian soy and Chilean copper straight to Shanghai, bypassing Panama and LA entirely.
Look north.
The Arctic Route, once dismissed as a geopolitical curiosity, is gradually becoming a viable shipping route as ice conditions change. It can cut 40% off the Suez load.
Then look inland.
Today, more than 82 rail routes link China to 200+ European cities via Kazakhstan and Russia, the so-called "Iron Silk Road."
Alongside it, the Middle Corridor provides another path through the Caspian, reducing dependence on both Russia and the Red Sea.
Meanwhile, the International North-South Transport Corridor (INSTC) links India, Iran, Central Asia and Russia while bypassing the Suez Canal altogether.
Industry-Specific Routes
The most striking one is that industries are starting to build their own sector-specific routes, from electric vehicles and lithium to semiconductors.
Material mined in Kazakhstan can move to processing hubs in China before finished EVs travel by rail directly to the European market in roughly half the time required by traditional sea freight.
The Non-Geographic Chokepoints
If you look beyond borders, an entirely different map of chokepoints appears.
Rare earth processing. Semiconductor fabrication. Advanced packaging.
Recently, I just learned that ultra-high-voltage transmission technology, moving power a thousand miles with almost no loss, can be another proprietary export.
The new chokepoint of the AI era isn't a strait. It's the chips and the grid.
02. Inference Economy: Silicon, Training Method and Input Data
Three Bets Against Brute Force of Compute
Recently even Western mainstream media don't deny that China has built a best-in-class energy transition case among nations. China is probably the only country that can pull off a project like East Data, West Computing (东数西算) at national scale.
If energy is the new chokepoint, the obvious move for China would be to double down on the energy-draining token economy: export its high energy capacity to win the token economy outright.
Instead, China appears to be making a different bet.
Read Qiushi
If you want to understand Beijing's political thinking, you read Qiushi (求是).
A recent Qiushi article, titled 准确把握人工智能发展前沿与竞争格局 ("Accurately grasping the technological frontiers and competitive landscape of AI"), indicates China's overall AI strategy: 效率优先 (efficiency first), 算力精准供给 (precision compute allocation by workload).
My read: this article shows Beijing has now developed its own doctrine language for AI strategy. It's the ultimate counter to Washington's chip strategy, which assumes one move: training parity. Match GPU for GPU. Guard the frontier with export controls.
China is placing a different bet: build inference chips. Run models cheaply at scale, not train them from scratch.
Inference Chips
A 5-year-old learning math for the first time by solving thousands of practice problems is running on a training chip. That same kid, grown up, taking a quick math quiz using what they already know, is an inference chip.
Inference chips optimize for low-latency, low-bandwidth single forward passes over raw compute: one fixed, frozen set of weights, run once per query.
DeepSeek, already running on Huawei's Ascend chips, is now developing its own custom inference chip, a move mirrored by peers like OpenAI (partnering with Broadcom). Due to sanctions, DeepSeek's ASIC relies on 7nm manufacturing constraints, leaning on architectural cleverness over bleeding-edge hardware.
This is a...