Guizhou: Investing in China’s Big Data Valley and its Sustainable Development

China is rapidly transforming itself into a huge innovation hub. Business activity, including entrepreneurial ventures, industrial production, and research and development in major cities, such as Beijing, Shanghai, and Hangzhou as well as the Greater Bay Area that includes Hong Kong, Guangzhou, and Shenzhen, are actively contributing to the next phase of the tech innovation process.

Besides the frontier tech hubs, during the last decade Guizhou, a province situated in the western part of China, has gradually revealed its own enormous potential. Guizhou is ranked among China’s top three provinces in terms of GDP growth and the local government has announced plans to increase the added value of its digital economy – so that it reaches 33 percent of the province’s total GDP by 2022. The driver behind this growth is big data.

How Guizhou came to be China’s big data valley

Guizhou province, thanks to the provincial government’s ability to tap into its key characteristics, has transformed from a landlocked hinterland area surrounded by mountains to a well-connected transportation and internet hub.

Guizhou’s location to set up data centers is explained in large part by its geography – it is far from major earthquake zones and has a cool climate; the average temperature here is around 16°C / 60.8°F. This keeps the region’s data centers relatively secure and significantly reduces expenses on cooling equipment.

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Further, Guizhou is the main contributor to the country’s west-east electricity transmission, it has a stable and reliable electric power supply sourced from thermal and hydropower and at relatively cheaper electricity prices.

Moreover, Guizhou has established a three-dimensional transportation network, comprising of highways, expressways, high-speed rail, waterways, and aviation.

The province is now home to 23 key data centers that are either in operation or under construction, housing an estimated total of four million servers. This is the reason why Guizhou is called China’s Big Data Valley.

The turning point for Guizhou development has also been the launch of the Gui An New Area in its capital city Guiyang in 2017. The number of enterprises associated with big data in the province soared from less than 1,000 in 2013 to 9,551 in 2018. Guizhou has also hosted China International Big Data Industry Expo for five years, attracting 448 enterprises from 59 countries and regions in 2019, including more than 150 foreign companies, of which 39 were Fortune 500 firms. Leading tech companies, such as Apple, Foxconn, Qualcomm, Intel, Hewlett-Packard, Oracle, SAP, Alibaba, Tencent, and Huawei, have established their presence there.

Push for sustainable development

The urgency for pursuing a sustainable development strategy was stressed by President Xi Jinping during his visit to Guizhou right before the 2021 Chinese New Year, when he remarked the importance of making an effective transition from consolidating poverty alleviation achievements to promoting rural vitalization. Xi also stated that the ecological environment of the province is its biggest development strength and competitive edge, therefore the priority must be given to Guizhou’s ecological conservation and green development.

Guizhou is the evidence that China is pursuing innovation – more specifically, digital innovation – while being environmentally conscious, sensing and working towards developing capacity in renewables and green technology.

Encouraged foreign investments in Guizhou

On December 28, 2020, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) rolled out the Catalogue of Industries for Encouraging Foreign Investment (2020 Edition) (hereafter “2020 FI Encouraged Catalogue”), effective from January 27, 2021.

The 2020 FI Encouraged Catalogue regulates foreign investments at the national level as well as the central, western, and north-eastern regions.

Thus, Guizhou, as a province in the western region also comes under the purview of the 2020 FI Encouraged Catalogue. Foreign investments in specific industries mentioned in the 2020 FI Encouraged Catalogue will benefit from favorable policies.

To know more about the 2020 FI Encouraged Catalogue, read: China Expands Encouraged Catalogue, Improves Foreign Investor Access (china-briefing.com)

The industries identified by the Chinese government to encourage foreign investments into Guizhou province shows the focus on ecological and sustainable innovation in both building up industrial capacity while also improving the quality of life for its people.

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