• China has licensed over 7,000 data centres, many running at just 20–30% utilisation.
• A unified computing platform is slated for 2028 to monetise unused capacity and curb inefficient investments.
What happened: Nationwide cloud to link 7,000 facilities
China’s Ministry of Industry and Information Technology (MIIT), together with state telecom firms China Mobile, China Unicom and China Telecom, is developing a nationwide cloud platform to link more than 7,000 data centres built under the “Eastern Data, Western Computing” scheme. The project aims to capture underutilised compute resources—some operating at 20–30% capacity—and monetise extra capacity through a centralised, state‑managed system. Meanwhile, the National Development and Reform Commission (NDRC) has initiated a sector-wide review and tightened the regulatory framework, setting utilisation thresholds and banning local governments from small‑scale infrastructure investments to prevent wasteful overbuilding .
Construction soared in the western provinces, spurred by cheaper power and strong government backing. However, many centres were built without real demand, prompting over 100 project cancellations in the past 18 months alone .
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Why it’s important
China’s shift marks a change in tone: the country is stepping back from a rush to build ever more data centres and is now focused on making the existing network work harder. After years of rapid investment, many sites are running far below capacity. Linking them through a single state-managed cloud is a way to turn unused servers into usable computing power and avoid further waste while still fuelling the country’s AI and cloud ambitions.
A nationwide platform also signals a move to bring consistency to a patchwork of regional projects. If Beijing can get thousands of centres to work as one, it could create a more efficient digital backbone, moving workloads between provinces and reducing the risk of stranded assets. The plan aims to have standardised interconnection in place by 2028, a sign the government is playing the long game.
The challenge will be turning policy into performance. Distance creates latency in western facilities, and mismatched hardware—such as different chip architectures between domestic and foreign suppliers—makes smooth integration harder. There is also the political trade-off: stricter rules on utilisation mean less room for local governments to use new builds as an economic driver.
It is a pragmatic shift, signalling that simply pouring money into concrete and servers is no longer enough. How well this new phase works will decide whether China’s data centre boom becomes a foundation for its AI goals or a costly case of overcapacity.
