New Data Centers in China: Data from the East, Computing Power in the West

Eight regions in China are to be developed into national hubs for computing power by building 10 national data center clusters: Jing Jin Ji 京津冀 (Beijing, Tianjin, Hebei Province), Changsanjiao 长三角 (Yangtze River Delta), Yue Xiang Ao Dawan Qu 粤巷澳大湾区 (Guangdong, Hong Kong, Macau – Greater Bay Area)), Chengyu 成渝 (Chongqing and Chengdu), Inner Mongolia, Guizhou, Gansu, and Ningxia. This is according to a joint decision by the National Development and Reform Commission, the Cyberspace Administration, the Ministry of Industry and Information Technology, and the National Energy Administration.

The goal is to shorten data transmission times, reduce related costs and ensure – ideally green – power supply to data centers, while coordinating energy consumption metrics. China hopes that the expansion of data center clusters will also have a positive impact on other industries, such as construction, IT equipment, telecommunications and software, as well as green energy providers in the relevant regions.

Most of the data comes from the major hubs in the eastern region, where many large cities and thus industries are located. So far, most data centers have been built in this region. However, establishing data centers in the west has one major advantage: data centers require a lot of energy and while there is a shortage of power in eastern China, western China is ideal for renewable energy generation. 

The new data centers in the west – Inner Mongolia, Ningxia, Gansu, Chengdu/Chongqing and Guizhou – will be used for background processing, offline analytics and data storage and backup, while the data centers in the east – Jing Jin Ji, Yangtze River Delta and Greater Bay Area – will be used for the industrial Internet, financial security, disaster warning, telemedicine, video calls and artificial intelligence.

This development plan is intended to create more synergy between western and eastern China. We do not know an exact timeline for this project, but we expect China to proceed quickly. German and European companies in China should consider this new development in their strategic IT planning.

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