China promises big investment in big data as GDP numbers look shaky

Business & Technology

With COVID lockdowns stopping parts of the Chinese economy and an uncertain global outlook, Beijing wants to plant green shoots in fields of big data.

Illustration by Derek Zheng

Chinese business news is awash in first-quarter data today. GDP growth came in at 4.8%, a drop of 0.8 percentage points month-on-month, and possibly a sign of things to come for the second quarter as the impact of the current lockdown starts to register in the economy.

But for the last quarter at least, fixed asset investment was up. Investments in infrastructure, land, machinery, and equipment were 10.48 billion yuan ($1.64 billion) in March, a year-on-year increase of 9.3%, and a faster growth rate than expected amid rising energy and commodity prices.

  • In the first quarter, the government sought to stabilize the investment rate by promoting the early implementation of construction projects, such as the new section of the Sichuan-Tibet Railway from Ya’an to Nyingchi.
  • Investment in the mining industry increased by 19% year-on-year, in the manufacturing industry by 15.6% year-on-year, and in the production and supply of utilities industry by 19.3% year-on-year.

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Big data to drive government investment push for the rest of the year?

At a press conference on Friday, the deputy director of the National Development and Reform Commission (NDRC) looked forward as well as back, and outlined several areas slated for future large investments, and one in particular: big data.

Investment in big data centers will increase at more than 20% per year up till 2025, and the cumulative investment will exceed 3 trillion yuan ($470.79 billion).

  • Twenty-five projects are underway to construct 10 national data centers with the added computing power of 27 million personal computers at a cost of 190 million yuan ($29.81 million).
  • There is a push to invest more in digital infrastructure in the poorer, less developed western parts of the country, but the new data centers will be located all over China, including in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Greater Bay Area (Guangdong-Hong Kong-Macao), the Chengdu-Chongqing region, and the provinces of Inner Mongolia, Guizhou, Gansu, and Ningxia.

Why the push on big data now? Big data centers are the digital companions of physical infrastructure. Such data centers can drive investment in various upstream and downstream industries such as IT, R&D and manufacturing, communication, and energy, and can also promote comprehensive digital transformation, something that documents released today by the China Securities Regulatory Commission underlines.