A believed $63b investment predicted after China approves 10 national-data center clusters to boost computing power
Published: Feb 18, 2022 06:40 PM
People visit a display center of the National Big Data Comprehensive Pilot Area in southwest China's Guizhou Province, May 22, 2019. (Xinhua/Ou Dongqu)

People visit a display center of the National Big Data Comprehensive Pilot Area in southwest China's Guizhou Province, May 22, 2019. (Xinhua/Ou Dongqu)

Market watchers predicted that clusters construction investment, from upstream and downstream could be around 400 billion yuan ($63 billion) after the government approved the construction of eight national computing hubs and 10 national-data center clusters strengthening China's computing power.

Data center stocks rally on China's A-share market on Friday with more than 10 stocks hitting their daily upper limit after such approval.

The stocks include service provider for artificial intelligent architecture and digital communities Shanghai Yanhua Smartech and data center service provider Shanghai AtHub Co, which both saw strong gains on Friday morning. 

UCloud, a cloud computing service platform said on Friday that it has two clouding centers, Ulanqab and Shanghai are among the ten clusters approved by the government, and will build a number of demonstration scenarios for the plan.

The Ulanqab Cloud computing center has an overall planned land size of near 140,000 square meters. The five planned data centers will accommodate a total of 6,000 8.8KW cabinets, and the Shanghai Qingpu cloud computing center is about 55,400 square meters, with the first phase accommodating 3,000 cabinets. It is expected to be put into production in 2022.

The new clusters,  combined with an extended industrial chain, could drive up 400-billion-yuan ($63 billion) investment from upstream and downstream, Wang Peng, an assistant professor at the Gaoling School of Artificial Intelligence at the Renmin University of China told the Global Times on Friday.

The investment is mainly depended on the central government, and it could come from the debt issued by the government, he noted.
China will begin the construction of computing centers in multiple provinces and regions while planning a total of ten national data center clusters across the nation, an official from the National Development and Reform Commission (NDRC) said on Thursday. 

The move shows the country has already completed the overall layout design for a national integrated big data center system and the official start of the country's strategic project of "transporting data from eastern regions of China to western regions for storage and calculation."

"Like with the South-to-North Water Diversion Project and the west-east power transmission program, we should give full play to the advantage of the country's system and mechanism to make integrated arrangements at the national level," NDRC official Sun Wei said during a recent interview with Xinhua.

Wang also noted that the clusters could help solve the problem of mismatched allocation of resources, and even help the employment in the western part of the country. 

The eight national computing hubs will be built in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, the Chengdu-Chongqing economic circle, North China's Inner Mongolia Autonomous Region, Southwest China's Guizhou Province, Northwest China's Gansu Province and Ningxia Hui Autonomous Region.

Most of China's data centers are currently located in eastern regions, and the large-scale development of data centers in the region is unsustainable due to constraints on vacant land, energy and other resources. Therefore, transporting data from the east to the west will optimize resource allocation and enhance the efficiency of resource use, according to the NDRC.

Along with the growth of the big-data sector, the Ministry of Industry and Information Technology has unveiled a plan for the industry during the 14th Five-Year Plan period (2021-2025). It forecasts that China's big-data industry will exceed 3 trillion yuan ($474 billion) in size by the end of 2025, with a compound annual growth rate of around 25 percent.