by Reuters staff
July 24 (Reuters)
China is currently working to organize its data center sector, reflecting the country’s efforts to optimize existing resources, as infrastructure has grown randomly. Now the government is seeking to regain control and seeks to lead the artificial intelligence and advanced computing market. The challenge is to align different regions of the country within a single national strategy.
Increase in number of public data centers hinders China’s plans
China is taking steps to build a network to sell computing power and curb the unwieldy growth of data centres after thousands of local government-backed centres that sprouted in the country caused a capacity glut and threatened their viability. The state planner is conducting a nationwide assessment of the sector after a three-year data centre building boom, according to two sources familiar with the matter and a document seen by Reuters.
Beijing is also seeking to set up a national, state-run cloud service for harnessing surplus computing power, according to Chinese government policy advisers. The Ministry of Industry and Information Technology (MIIT) is collaborating with China’s three state telecoms companies on ways to connect the data centres in a network to create a platform that can sell the computing power, they said. Computing power is a crucial element in the race for technological supremacy between China and the U.S. Besides being an embarrassment for Beijing, unused computing power and financially shaky data centres could hinder China’s ambitions in the development of artificial intelligence capabilities.
“Everything will be handed over to our cloud to perform unified organisation, orchestration, and scheduling capabilities,” Chen Yili, deputy chief engineer at the China Academy of Information and Communications Technology, a think tank affiliated to the industry ministry, told an industry conference in Beijing last month. Chen did not specify details of the cloud service proposal, but his presentation materials showed China was targeting standardised interconnection of public computing power nationwide by 2028, even as some analysts were skeptical about the plan given the technological challenges it posed.
Infrastructure in the interior: “Eastern Data, Western Computing” project
This initiative has become essential in China’s strategy to decentralize access to high-performance computing across the country and reduce costs. Most facilities in Western regions are less developed, so the government wants to take advantage of lower costs to meet the high demand in economic centers.
China’s data centre building boom kickstarted in 2022 after Beijing launched an ambitious infrastructure project called “Eastern Data, Western Computing”, aimed at coordinating data centre construction by concentrating facilities in western regions – where energy costs are cheaper – to meet demand from the eastern economic hubs. Chen said at the June event that the industry ministry has so far licensed at least 7,000 computing centers.
What are the main difficulties of the national plan?
Industry sources and Chinese policy advisers said the formation of a computing power network will not be easy, given that the technology for data centers to efficiently transfer the power to users in real-time remains underdeveloped. When the Chinese government rolled out the Eastern Data, Western Computing project, it targeted a maximum latency of 20 milliseconds by 2025, a threshold necessary for real-time applications such as high-frequency trading and financial services.
This goal is quite ambitious, as it involves overcoming barriers such as equipment heterogeneity, geographic distances, and network limitations. Without this robust technological foundation for integration under these conditions, the promise of a national public cloud risks becoming ineffective.ย
What can we expect from this project?
China’s plans for decentralizing its computing network are both complex and ambitious. Becoming a functional public network requires more than political will, but also investment and technical innovation. If successful, the initiative will position the country as a global leader in high-performance computing.