I thought the chinese models were cheaper per token, but about the same or more expensive on tasks because they used more tokens for reasoning. Cutting even further, seems like a really big leap.

It all comes back to electricity cost. China has cheaper electricity so as long as China keeps pace there is no way for American companies to undercut them. Each boolean operation in China is cheaper than the one in America.

> China: Household rates average around $0.08 / kWh (¥0.53/kWh).

vs

> US: Household rates average around $0.16 / kWh, though regional variation is massive—ranging from ~$0.10/kWh in low-cost states (like Washington or Louisiana) to $0.30–$0.45+/kWh in high-cost areas like California or Hawaii.