In Depth: Chinese Industrial Hub Stakes Future on Green, High-Tech

Zhangjiakou, historically dependent on coal, steel, and other traditional industries, is undergoing a significant economic transformation to focus on renewable energy and big data. The city leverages its abundant natural resources and proximity to Beijing as it aspires to establish itself as a key player in modern sectors [para. 1]. This shift is illustrated by a major project: a 20 billion yuan ($2.8 billion) intelligent computing center powered by wind energy, being constructed by local company Ming Energy. This marks the city’s first attempt at such a large-scale hyperscale computing hub so close to the Chinese capital [para. 2][para. 3]. Officials and investors are optimistic, but the transition has been costly and revenue from these emerging sectors remains limited in the short term [para. 4][para. 5].

After co-hosting the 2022 Winter Olympics, Zhangjiakou was prompted to diversify and clean up its economy to align with China’s "dual carbon" goals. This necessitated the closure of mines and steel mills that had long fueled its economy, leading to short-term economic setbacks [para. 4][para. 10][para. 11]. However, the Olympics also spurred a surge in winter sports and tourism, and accelerated infrastructural upgrades, such as the high-speed railway to Beijing which reduced travel times to one hour [para. 8][para. 9]. Despite these positives, Zhangjiakou’s GDP in 2024 remained the lowest in Hebei province at 191.3 billion yuan, underscoring the challenges of transformation [para. 5].

The nationwide push for renewable energy amid carbon neutrality goals has propelled Zhangjiakou into the spotlight for wind and solar power development. By May 2025, local wind and solar capacity had skyrocketed from 8.42 GW in 2015 to over 42 GW [para. 13]. Despite its own lower power needs (peak local usage maxes out at 4.11 GW), the city exports most of its renewable energy to other regions. Recently, grid capacity limits have led to rising energy wastage rates—curtailment hit 8-9% in 2024 versus 5% prior, prompting urgent calls to boost local consumption [para. 17].

Data centers—especially those supporting artificial intelligence—have become a strategic solution, given their heavy electricity demands. Ming Yang Smart Energy’s partnership with Alibaba exemplifies this, as the e-commerce giant’s local data center will use 290 million kWh annually from a new wind farm, supporting both energy consumption and green mandates that require over 80% renewable consumption by major data centers [para. 20][para. 21][para. 22]. By mid-2025, data centers drove an electricity consumption increase of 13.51% in Zhangjiakou, far above the national average, with 48 centers housing 1.8 million servers [para. 27][para. 28][para. 29].

However, the economic return on these investments remains slow. Local government debt has ballooned, with outstanding obligations rising from 87.8 billion yuan in 2021 to 154.7 billion yuan in 2024, partly because of tax incentives and slow-maturing revenue streams from both data and renewable energy sectors [para. 35][para. 36][para. 38]. While high-tech firms benefit from VAT rebates and other favorable policies, this often means payouts to companies precede meaningful local tax revenue generation. These challenges are further intensified by price wars in the solar sector and the fact that internet giants, though building large data facilities locally, mainly generate revenue elsewhere [para. 39][para. 41].

To address this, the city provides renewable energy quotas as an investment incentive, rather than direct subsidies, in hopes of securing stable long-term income. City officials stress patience and a long-term outlook for these new economic pillars, highlighting that current efforts are laying the groundwork for a more prosperous, diversified future [para. 46][para. 47][para. 48].