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Where does China’s production capacity come from?

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By Zhong Caiwen, People’s Daily

China’s production capacity is deeply rooted in the country’s vast market.

China is a developing country with a population of over 1.4 billion. The fundamental purpose of its production is to meet the ever-growing expectation of the people for a better life.

Since the reform and opening up, China has transitioned from a planned economy to a socialist market economy, which has boosted production in different sectors and enhanced its supply capabilities.

As China’s economy continues to grow steadily and with the incremental upgrading of Chinese industries, the potential of China’s domestic demand has been consistently expanding and unleashed, which will enhance production capacity in a cycle of mutual reinforcement.

China boasts a large and steadily expanding middle-income group, with per capita GDP surpassing $12,000, creating a huge consumer market.

In 2023, China’s total retail sales of consumer goods exceeded 47 trillion yuan ($6.5 trillion), with final consumption expenditure contributing 82.5 percent to economic growth. Consumption has become the main engine driving economic growth and the primary driver of China’s expansion of production capacity.

Over the past few years, China has been the world’s largest consumer of automobiles, home appliances, clothing, and jewelries, among others. This wouldn’t have been possible without massive domestic production capacity, as relying solely on imports wouldn’t have been enough.

Technological innovation and enhanced production efficiency are the driving forces of China’s production capacity.

Innovation serves as the engine of productivity. China adopts the innovation-driven development strategy and keeps expanding investment in scientific and technological innovation. It ranks second in the world in terms of total R&D investment. A total of 679 Chinese companies were listed among the world’s top 2,500 R&D investors last year.

Technological innovation has enhanced China’s production efficiency and forged more comparative advantages. In recent years, China’s traditional top three products, or the “old three” — mobile phones, computers and home appliances, and three major tech-intensive green products, or the “new three” — new energy vehicles (NEVs), lithium-ion batteries and photovoltaic products, have gained widespread popularity in the global market. This success is attributed to the continuous technological innovation and efficiency improvements in the extensive and specialized industries in China, along with the unwavering commitment to excellence by Chinese entrepreneurs.

It is particularly important to see that China is the only country in the world that possesses all the industrial categories in the United Nations industrial classification. By harnessing the well-established industrial ecosystem and leveraging market dynamics, China can quickly transform technological innovation achievements into high-quality production capacity.

A Bloomberg article said that the global energy transition is largely attributed to China’s provision of low-cost and clean products.

China is embracing the new round of sci-tech revolution and industrial transformation worldwide and has no intention of criticizing or suppressing other countries that are leading in areas such as artificial intelligence, commercial aerospace, and low-orbit satellites. Instead, China is genuinely committed to learning from others with an aim to promote scientific and technological development through mutual learning and exchanges.

Similarly, developed countries should embrace China’s technological advancements in areas like new energy with fairness and openness, keeping in mind the benefits of all humanity.

A large portion of China’s production capacity is attributed to multinationals.

Foreign-invested enterprises have played a significant role in the growth of China’s manufacturing. As China becomes more integrated into the global economy, many foreign enterprises have chosen China as their primary production base, producing goods for sale on a global scale. Among them are many American companies.

For instance, the remarkable success of Apple as the second most profitable and highest-valued company in the world can be largely credited to the dedicated Chinese workers and efficient Chinese enterprises along its supply chain. Apple has announced to expand its R&D labs in China to better support its production line.

Tesla produced over 1.84 million new energy vehicles last year, with half of them being manufactured in its Shanghai Gigafactory. Tesla’s exports from China account for nearly 30 percent of Chinese exports of the NEVs.

Multinationals often follow a typical approach: making decisions at headquarters, manufacturing products in China, distributing them in global markets including China, and repatriating the profits generated to their home countries. Such business model can lead to win-win outcomes for all stakeholders.

By launching more important projects in China in the coming future, particularly in industries such as chemistry and the NEVs, multinationals are set to see more improvements in their competitiveness and production capacity.

The growth of China’s production capacity is credited to the combined efforts of an efficient market and a proactive government.

Throughout the history of industrial development in developed countries, successful industrial upgrading relied on both market dynamics and government strategies to guide and support industries.

For instance, the rapid economic growth of countries like Japan, Germany, and South Korea after World War II was largely a result of government assistance for key industries. Industrial policies have been a longstanding practice in the United States, with the CHIPS and Science Act alone providing over $52 billion in subsidies.

Since the reform and opening up, China has drawn lessons from developed countries and used strong domestic demand to drive economic growth. By directing the allocation of resources through industrial planning, China has been actively developing a modern industrial system.

Since the accession to the World Trade Organization, China has consistently complied with the subsidy-related rules and developed its production capacity within a market economy environment.

China’s industrial policies never violate market principles. China does not seek to exclude competition with other countries or unreasonably favor its own industries. Instead, China aims to continuously improve marketization levels and adopt tailored industrial policies that suit local conditions. This approach allows for orderly competition among industries, ultimately achieving an equilibrium between supply and demand.

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Shantou taps new growth momentum via AI token exports

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By Li Gang, People’s Daily

As artificial intelligence (AI) accelerates the transformation of global industries, a new form of digital trade is emerging in the southern Chinese city of Shantou: exporting computing services measured not in physical goods, but in AI tokens.

In late April, Shantou, Guangdong province completed full-chain verification for what has become known as “token exports” — a model in which computing power remains within China while high-value AI services are delivered to overseas users. Within just one month, average daily token usage surged from 100 million to the tens-of-billions level.

The practical application of this model is already well underway. 

Recently, when a user in Singapore activated an AI-powered toy and gave a simple command — “Tell me a fairy tale” — the spoken command traveled through the network directly to a dedicated overseas computing zone inside a computing center in Shantou. 

Local deployed AI agents wrap up speech recognition in under one second and craft custom story content, firing the finished audio back to the Singapore-based toy device in as little as 0.1 seconds.

The user repeated the process multiple times, eventually listening to five stories in total. Approximately 100,000 tokens were consumed during the interaction and billed in real time at a rate of 2 yuan ($0.3) per one million tokens.

When payment arrived, a complete commercial cycle was achieved, marking the successful realization of Shantou’s “token export” model.

Tokens represent the smallest discrete calculation unit for large AI models to process information. They have become a key indicator of intelligent computing capacity and, increasingly, a new carrier of value in the digital economy.

Inside the China (Shantou) Pilot Zone for Economic and Cultural Cooperation with Overseas Chinese, token exports are already transforming the economics of electricity.

Today, overseas users across multiple countries and regions in Southeast Asia are accessing token services generated in Shantou.

“Data flows in from abroad and all processed outputs head back overseas, with zero compromise to end-user experience,” explained Cai Qichen, an engineer at the Shantou Branch of wireless carrier China Mobile. “Token costs have already been integrated into product service packages, making future usage more convenient.”

According to estimates from toy manufacturer SHOWMAC based in Shenzhen, Guangdong province, using Shantou’s computing services reduces costs by more than 30 percent compared with directly purchasing overseas computing resources.

Meanwhile, inside computing centers, turning electricity into AI tokens delivers dramatic value appreciation. A kilowatt-hour of electricity, which comes at a cost of roughly 0.5 yuan($0.07) , can be transformed through AI computing into tokens and then exported at a price of 11 yuan($1.6), representing a twenty-two-fold increase.

As one of eastern Guangdong’s major offshore wind power bases, Shantou has already connected 1.2 million kilowatts of installed capacity to China’s power grid.

The electricity itself does not need to cross borders. Computing power remains within China. What gets exported instead are high-value digital services, turning electricity into a form of hard currency for cross-border digital trade.

Ultra-low network latency forms the technical backbone making token exports feasible.

“More than half of China’s outbound bandwidth carried by international submarine cables lands in Shantou, and the city is also home to five undersea trunk cables linking destinations worldwide,” said Hong Zhebin, chief technology officer of the international submarine cable landing station operated by the Shantou branch of wireless carrier China Telecom.

“The latency between Shantou and Singapore is only 32.7 milliseconds, quicker than the blink of an eye,” Hong added.

Hong Yu with the Shantou Branch of China Mobile, added that Shantou’s overseas computing services offer stable response speeds, regulatory compliance, and substantial cost advantages.

“Our pricing is only 1/3 to 1/2 that of mainstream international platforms, while customer retention exceeds 70 percent,” Hong told People’s Daily.

Yet building a complete end-to-end system is only the starting point. Shantou is now attempting to transform itself from a transit city for digital infrastructure into an ecosystem hub.

Leading computing companies and developers are gathering rapidly. Pilot platforms have passed acceptance reviews. Commercial closed loops have already emerged in applications ranging from AI toys to intelligent manufacturing, with large-scale operations expected soon.

Shantou’s Chenghai district has long been known as the “toy capital of China.” As AI becomes increasingly integrated with the toy industry, the city has launched an AI toy innovation center and the Shantou AI Laboratory, striving to become the “AI toy capital of China.”

At the exhibition space of one local tech firm sits Amy, an AI desktop robot capable of fluid multilingual conversation.

“It is equipped with a multilingual intelligent voice interaction system capable of real-time recognition and conversation in dozens of languages,” said the company’s general manager Chen Ruifeng.

The technology has already been integrated into multiple AI toy products exported to countries including the United Kingdom, Russia, and Japan.

Shantou’s token export model allows AI toy manufacturers to access domestic large language models at costs far below those of overseas alternatives.

“The cost of using overseas AI models can be dozens of times higher than domestic models,” Chen said. The company’s AI toys currently run on Chinese large models including DeepSeek and Doubao.

“Token exports have significantly increased both product value-added and international competitiveness,” he said.

The Shantou branch of wireless carrier China Unicom, together with a Guangdong-based tech firm, has established dedicated lines connecting Shantou and Vietnam, delivering cross-border computing services to Aachen Sv, a Chinese-invested fiber-optic company operating in Vietnam.

Vietnamese users accessing large models such as DeepSeek and Qwen experience extremely low latency with zero packet loss. “In less than a month, more than a dozen companies have approached us for consultations,” an employee of the Guangdong-based tech firm said.

Meanwhile, the Guangdong branch of China Mobile has launched an OpenClaw intelligent agent framework, providing integrated AI service packages that allow traditional toys to complete intelligent upgrades in as little as 15 days.

From toys to textiles, cross-border e-commerce, and high-end manufacturing, tokens are increasingly becoming the digital fuel powering Shantou’s industrial upgrading.

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Sanxingdui Museum transforms ancient relics into interactive experiences

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By Song Haoxin, People’s Daily

What if museum visitors could truly interact with cultural relics rather than merely observe them through glass displays? At the Sanxingdui Museum in southwest China’s Sichuan province, a specially designed interactive hall is revolutionizing cultural engagement.

Within this 1,300-square-meter space, nearly every exhibit invites touch, operation, or participation. Visitors immerse themselves in installations inspired by the ancient Shu civilization, blending education with entertainment.

By trying on replicas of headwear on bronze statues discovered in Sanxingdui Ruins, for example, visitors can not only take photos of themselves but also learn about the symbolic meanings behind different headpieces. 

Guests can don replicas of bronze statue headwear from the Sanxingdui Ruins, learning their symbolic meanings while capturing photos. Augmented reality allows dancing alongside virtual Sanxingdui figures for social media sharing. A creation zone even enables “time travel” to experience ancient bronze-casting and construction techniques.

These innovations transform traditional museum visits, offering deeper cultural understanding through hands-on interaction. “This hall emerged from extensive brainstorming,” explained Zhu Yarong, deputy director of the management committee of the Sanxingdui Ruins site. 

“We’re transitioning from passive relic viewing to interactive engagement, bridging the gap between audiences and history.”

Previously, museum experiences were largely one-directional with limited engagement. Visitors viewed relics through display cases, usually stopping mainly to take photographs, with relatively limited forms of engagement. By liberating artifacts from display cases into interactive settings, Sanxingdui is pioneering a shift from didactic presentation to open cultural dialogue.

Traditional exhibition spaces remain popular, while digital innovations attract growing interest. A VR project employs digital twin technology to recreate 1:1 scale excavation sites — complete with protective shelters and cabins — placing visitors at the archaeological forefront.

Another project, Heaven and Earth Echoes — Sanxingdui Panoramic Sound and Vision Digital Art Theater, features an interactive panoramic LED dome with a diameter of 20 meters and a resolution approaching 16K. The massive dome creates a deeply immersive atmosphere. By waving digital torches in their hands, visitors can trigger sacred birds to circle above them across the dome, experiencing the ancient Shu civilization through an interplay of sound and imagery.

“The digital technology made me feel as if I were racing across the Mamu River. That sense of traveling through time was incredible,” said Hao Yong, a tourist from southwest China’s Chongqing municipality who came specifically to experience a virtual reality program.

From passive observation to active participation, Sanxingdui Museum continues introducing new interactive experiences that transform cultural relics into living carriers of dialogue and engagement, helping keep the sparks of Chinese civilization alive for new generations.

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A living testimony about MKA: The Aondoakaa that I know Written By Brahms Tor-Ikuan

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My people of Benue State,

I am not speaking to you today as a politician. I am speaking as a brother whose family was held up by Chief Mike Kaase Aondoakaa, MKA, when we had no one else to hold onto.

My elder brother, Verem Ukaa-Ikuan, was not just my blood. He was a very dear and close friend to Chief MKA. When my brother fell ill and was diagnosed with liver damage caused by poisoning, MKA didn’t treat it as someone else’s problem. He took it on as his own.

He worked closely with Verem during his time as Attorney General of the Federation, and when the sickness came, he moved immediately. Searches were conducted, and Apollo Hospital in India was earmarked for a liver transplant. Every travel arrangement was made personally by Chief MKA.

But we hit a wall. Verem was too weak to fly a long commercial flight. Only an air ambulance could get him to India alive. At that time, there was only one functional air ambulance in the entire country, owned by Julius Berger. It was completely out of reach for even the most high-profile citizens.

Chief MKA went all out. He did not give excuses. He did not delay. He used every connection and every ounce of influence he had to secure that air ambulance for my brother.

On the day it was secured, Barr. Terna Yaji, his Senior Special Assistant, called me a few minutes after 6pm. He told us to prepare Verem for departure and take him to Makurdi airport very early the following morning. I informed him, my brother passed on at exactly 6 o’clock a few minutes ago. I told Barr. Terna Yaji, and I saw a devastated MKA.

During the burial, Chief MKA was out of the country on national assignment. He was pained that he could not be there physically. His entire team, led by the late Onov Tyuulugh, represented him fully. And his message to us at the burial has never left me:

“If death were law, as the Attorney General, a law would have been made no matter what to ensure Verem will just not die but live forever.”

That is who Mike Kaase Aondoakaa is when nobody is watching. He does not abandon his people. He does not forget. He stood with our family then, and he has stood with us till date.

Now he is asking for the chance to govern Benue State.

Benue needs a governor with a heart like that. A governor who fights for you even when there’s no political gain. A governor who sees you as family, not as a vote.

I am standing with Chief Mike Kaase Aondoakaa for Governor of Benue State.
For compassion that moves to action.
For loyalty that does not fade.
For leadership that proves itself in the darkest hour.

Join me. Let us give Benue a leader who has already shown what he will do for us.

God bless Chief Mike Kaase Aondoakaa.
God bless Benue State.

Brahms Tor-Ikuan, a beneficiary of MKA’s benevolence writes from Makurdi

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