China invests billions in nationwide computing initative

China has poured over 43.5 billion yuan (£4.8 billion) into a massive computing data centre project, as the country seeks to bolster its technological capabilities amidst growing restrictions from the United States.

The initiative, dubbed “Eastern Data, Western Computing”, was officially launched in early 2022 as part of President Xi Jinping’s vision for a “digital China”. Liu Liehong, head of China’s National Data Bureau, revealed the investment figure at an industry conference in Guiyang on Thursday.

The project aims to construct eight major data centre hubs, primarily located in China’s western regions. This strategic placement allows the country to harness abundant energy resources in the west while transferring computing power to the economic powerhouses along the coast.

“We have installed over 1.95 million server racks, with approximately 63 per cent currently in use,” Liu stated, highlighting the project’s progress.

The substantial government investment comes as China faces increasing technological constraints from the US, which has limited exports of advanced computing products in recent years. These restrictions have affected industry leaders such as Nvidia, prompting China to accelerate the development of its own advanced computing capabilities.

Beyond direct government spending, Beijing has actively sought to attract private capital. Liu noted that the eight data centre hubs have drawn more than 200 billion yuan in total investment, underscoring the project’s appeal to various stakeholders.

The “Eastern Data, Western Computing” initiative is part of a broader push to enhance China’s technological infrastructure and reduce dependence on foreign technology. As tensions with the US continue to simmer, China’s investment in domestic computing power takes on added significance.