Sun, Aug 30, 2026 page9

• China goes rural in quest to power AI data centers

  • By Agatha Cantrill / AFP, GUIAN NEW AREA, China
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  In China’s hilly Guizhou Province, a cluster of European-style buildings complete with clock tower and multi-arched bridge emits a low, permanent hum — a clue to its unexpected identity as tech giant Huawei’s largest data center.

  The town-like complex is unique in design, but not in its placement. Dozens of data centers have been constructed in the southwestern province in the past few years.

  They are part of a government strategy that has seen much of the digital infrastructure for breakneck artificial intelligence (AI) development across China’s eastern seaboard established in the country’s less populated, rural west.

  

  Customers shop inside a Huawei store at Haikou International Duty-Free City in Haikou, China, on Sunday last week.

  Photo: Bloomberg

  The build-out is ongoing. China is on course to nearly double its data center capacity within the next five years, as a tech race with the US intensifies and countries everywhere try to swerve a computing crunch that could stymie AI expansion.

  The projects have transformed some places — such as Guian New Area, where the Huawei data center and others are located.

  “It used to be a barren mountain, but since the area has developed, transportation has become more convenient, trade has picked up, business opportunities have emerged,” local shopkeeper Shu Peihua said.

  When AFP visited last month, street vendors were catering to data center workers on their lunch break near a roadside banner calling for “promoting high-quality development,” a government tech policy catchphrase.

  In Europe and the US, data center construction has often been met with resistance from local communities citing concerns around energy prices, as well as environmental issues such as water usage and noise.

  However, dissent in China is tightly controlled, especially around central government policy.

  Still, Guian residents who spoke to AFP were positive about the changes to their area.

  A vendor selling savory pancakes, who did not give his name, said two universities had been established since the facilities were built.

  Another local, Li Xixiu, said that the main road had been developed because of the centers, which in general had “really boosted the economy of this entire area.”

  “All the villagers in our neighborhood now find jobs nearby, unlike before, when they had to go to other places,” Li said.

  In 2021, the government gave its strategy a name: Eastern Data Western Computing.

  The logic of construction in Guizhou, with its cooler climate, abundant renewable energy and empty space, is multifaceted. AI processing is extremely energy intensive, and China has demanded that data centers draw 80 percent of their power from renewable sources by the end of this decade.

  That makes regions such as Guizhou and Inner Mongolia, which have massively expanded renewable capacity such as solar and wind, ideal for operators looking to meet those commitments, Rystad Energy senior analyst Simeng Deng said.

  Energy-guzzling server farms could also help solve renewables’ issue of curtailment, or the over-production of energy.

  The data centers “can be an engine to digest or absorb the surplus of renewable power generation,” Deng said.

  Developing previously neglected parts of the countryside is another potential benefit.

  Despite the enthusiasm of the locals, some researchers question the overall economic gains to host regions.

  Data centers do not necessarily create a “huge spillover effect” on local jobs, said Andrew Stokols from Singapore Management University.

  “The hope is that you can use data centers as an engine for broader digital development... bringing in industries that will come in around data centers,” he said.

  However, in China and elsewhere, “immediate benefits have been elusive.”

  Guizhou has averaged an annual GDP growth rate of 7.4 percent over the past decade, but its wage growth over the same period was second to last nationwide, the Taiwan-based Research Institute for Democracy, Society and Emerging Technology (DSET) said.

  “This contrast suggests that while data centers drive heavy investment in land and equipment, their impact on boosting local per capita income remains limited,” DSET researchers Cartus Bo-Xiang You and Angela Glowacki said.

  Massive investment in infrastructure, coupled with policy incentives to attract data center builders, have earned Guizhou one of the highest debt burdens in the country.

  In 2024, Guizhou ranked 30th among Chinese provinces for its debt-to-revenue ratio, a DSET report showed, and 27th for its debt-to-GDP ratio.

  However, the demand for data processing capacity as countries scramble for technological supremacy means the building would continue.

  Even before ChatGPT heralded the beginning of the AI boom, Chinese policy documents were “talking about the idea that computing power is correlated with national power,” Stokols said.

  “It’s essential for national competitiveness in the age of digital technology... the AI competition has accelerated that,” he added.
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