China invested $6.1 billion in a state data center project in two years — the “Eastern Data, Western Computing” project aims to utilize the country’s undeveloped land

China invested $6.1 billion (or, more accurately, 43.5 billion yuan) into its new “Eastern Data, Western Computing” data center project launched in 2022. While many of its neighbors and global rivals attempt to restrict its technological ability, China is installing millions of server racks and computers connecting its western and eastern regions.

Liu Liehong, director of China’s National Data Bureau, revealed the 43.5 billion yuan figure to the press today at the Big Data Expo, a worldwide data conference held in southwest China. Guizhou Province, where the Expo is being hosted, is a major hub within China for data centers, notable for being the region where Apple’s Chinese data servers are located.

The “Eastern Data, Western Computing” initiative was first revealed by the Chinese government in 2021 and launched in the first months of 2022. Most of China’s urban hubs are near the eastern coast, creating infrastructural crowding. Western China is wide open for development with plenty of open land and energy, making it a natural location to offload the East’s heavy data needs. 

Eight data computing hubs are being built: three server hubs in the East Coast’s larger population centers and five hubs constructed in China’s central/west corridor to process the data stored in the eastern three hubs. Construction in Beijing is ten times more expensive than in the western provinces, and electricity costs are almost double, making China’s western provinces no-brainer locations for high-cost, location-agnostic infrastructure like data centers using this hub system. China also expects high-skilled jobs to maintain the centers and draw workers to the western regions, contributing to local growth.

Per Liehong’s Big Data Expo report, over 1.9 million server racks have been installed, with 1.2 racks populated across the hubs. China is wise to act quickly in populating its data centers, as global trade is not sympathetic to China’s tech needs. The U.S.-China trade war over tech has been raging for years with no end; ASML boss Peter Wennick shared his belief that the chip war will continue for decades. As sanctions from the U.S., Taiwan, and EU levied on China continue to rise, China’s tech woes will worsen.

It is unknown where all the “Eastern Data, Western Computing” project components will be sourced. Huawei has become a significant partner in the project’s development, though the scope of involvement is unclear. President Xi Jinping’s desire for a “digital China” powered exclusively by domestic hardware will likely mean that products from Nvidia or other non-Chinese companies will see limited use in these data centers.