China moves to boost digital sector growth in less developed provinces

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)

Chinese tech giants like Tencent and Alibaba are planning to build more data centers in western regions in the country, after the central government launched a project nicknamed "eastern data western calculation" to store and process more digital data in China's western provinces.

China has approved the setting up of hub nodes of the national computing power network in multiple regions including the Beijing-Tianjin-Hebei region, the Chengdu-Chongqing urban agglomeration, North China's Inner Mongolia Autonomous Region, and Northwest China's Gansu Province, which marks the official start of the "eastern data western calculation" project, according to a document released by several government departments recently.

A few technology giants said that they have taken similar action to transfer digital data generated in the east to data centers in the western and northern parts of China, where are rich in electricity.

"Tencent will actively participate in China's initiative of 'eastern data western calculation', optimize the current allocation of data centers, enhance trans-regional computing power relocation," said a Tencent representative involved in a relevant project.

According to information sent by Tencent to the Global Times, the tech giant has allocated data centers in a number of provinces. For example, the company has put into operation a data center in Gui'an of Guizhou, with a total area of about 470,000 square meters. Tencent is expected to store 300,000 servers in the data center.

Tencent also planned to build two data centers in the Beijing-Tianjin-Hebei region, as well as one data center in Shanghai.

Similarly, Alibaba Cloud has arranged to build more than 100 data centers in 25 regions around the world so far, said Qu Haifeng, a research fellow of the Alibaba Cloud data center, according to information sent by Alibaba Cloud to the Global Times on Sunday.

Five of them are super data centers. They are located in Hangzhou and Nantong; Heyuan of South China's Guangdong; Zhangbei of North China's Hebei Province, and Ulanqab, a city in Inner Mongolia Autonomous Region.

In June 2020, Alibaba Cloud's super data center in Ulanqab started providing cloud computing services. In November of that year, the company's western cloud computing data center was landed in Chengdu, Sichuan Province.

China's data center shares surged on Friday following news of the "eastern data western calculation" project, with Capitalonline Data Service Co rising by the trading limit of 10 percent.

Fu Liang, an independent technology expert, said it's an inevitable trend that high-tech companies take action to transfer their data to regions with more appropriate conditions - namely, cheaper electricity and cooler weather - as the need for computing power and data storage.

"Telecom operators are making arrangements for data relocation, and it's a trend that they will go with the policy direction, such as arranging data centers in the hub node regions, to see if they can get some bonuses," Fu told the Global Times.

According to Fu, transferring computing power to western regions will contribute to China's goal of cutting carbon emissions, as the geographical conditions of western regions will help companies decrease energy consumption.

Tech analyst Xiang Ligang also said that with China's development of high-technology sector like smart cars, demand is rising for computing power and data storage ability and safety.

According to him, China will form a "multiple-layer" data storage system, with "cold data" -referring to data that isn't frequently used like deposit data -being stored in the western regions, while other data will be stored in areas close the companies' locations.

Xiang also noted that the "eastern data western calculation" project will significantly stimulate local digital industry growth, while providing opportunities for relevant suppliers, like those providing data storage or heat radiation services.