Caixin
May 28, 2021 07:37 PM
BUSINESS & TECH

China to Build Data Center Clusters Nationwide to Plug Shortage

For years the lack of intensive and large-scale development of data centers has concerned industry players. Photo: VCG
For years the lack of intensive and large-scale development of data centers has concerned industry players. Photo: VCG

China plans to build clusters of data centers in eastern cities as well as western energy-rich regions in order to balance supply with demand, according to a government blueprint.

A national data center network will be developed, with major clusters built in the three relatively wealthy regions of the Beijing-Tianjin-Hebei metropolitan region, Yangtze River Delta, and Guangdong-Hong Kong-Macao Greater Bay Area, according to a document (link in Chinese) jointly issued Wednesday by four central government departments.

Data hubs will also be constructed in four western areas including Guizhou province and the Xinjiang Uyghur autonomous region, according to the plan, which was penned by the Ministry of Industry and Information Technology, Cyberspace Administration of China, National Energy Administration and National Development and Reform Commission (NDRC).

The move is aimed at ensuring data centers are “distributed in an orderly manner” to resolve the imbalance between supply and demand, and disorderly development, according to a separate statement (link in Chinese) issued by the NDRC.

A data center is a facility that organizations use to house their critical applications and data, including key components such as routers, switches, firewalls, storage systems, servers, and application-delivery controllers, according to Cisco Systems.

Growing demand for computing power from booming online shopping platforms and larger enterprises seeking to scale-up their data centers to ensure stability and reliability is fueling growth in the sector across China, according to an August report by ResearchAndMarkets.com.

China’s data center market was valued at $13.01 billion in 2019, and is expected to reach $36.18 billion by 2025, with compound annual growth rate of 19.2% during the period between 2020 and 2025, according to the report.

For years the lack of intensive and large-scale development of data centers has concerned industry players, with local governments asking cloud operators and telecom companies to build local data hubs in order to support the local economy, resulting in scattered distribution.

This is seen in some eastern regions, where the NDRC said there is huge demand, but limited growth of data centers due to tight energy supplies and high electricity costs.

Conversely, western areas have abundant energy resources and a suitable climate, but struggle to meet demand from the east because of narrow network bandwidths and high data transmission costs, it said.

Building regional clusters can encourage data centers to concentrate on resource-rich areas in western China and areas surrounding first-tier cities, thus achieving orderly growth, the statement added.

In principle, large data centers should be built in areas with abundant renewable energy resources, while modest-sized hubs can be established in urban centers, according to the plan.

The authorities also plan to make data transmission more efficient and less costly, while cutting carbon emissions when building data centers. Annual electricity usage by data centers accounts for about 2% of total national consumption, the statement said, adding that it is necessary to further explore potential energy savings and emissions reduction when constructing data centers.

China’s policymakers have vowed to tap into the value of data in economic development, and building data centers has been identified as a significant part of the strategy to develop new infrastructure.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com)

Download our app to receive breaking news alerts and read the news on the go.

Get our weekly free Must-Read newsletter.

You've accessed an article available only to subscribers
VIEW OPTIONS
Share this article
Open WeChat and scan the QR code