How China’s Computing‑Power Strategy Is Powering the AI Future

Introduction

Computing power, a new productive force of the digital economy, benefits from the state’s strategic planning and policy incentives, moving from a concept to practice, from fragmentation to coordination, and from a technical term to a strategic high‑ground supporting the construction of a digital superpower.

1. Understanding Computing Power

In the digital economy, computing power, algorithms, and data form the core of information infrastructure. Computing power is the ability to process data, integrating compute, network transport, and storage capabilities. It can be categorized into general‑purpose, intelligent, and super‑computing based on application scenarios and performance.

2. National Strategy and Policy Benefits

The government’s strategic roadmap, including the “East‑Data‑West‑Compute” initiative, has turned computing power into a strategic high‑ground. Eight hubs and ten clusters across the country have distinct roles: the eastern hubs (Beijing‑Tianjin‑Hebei, Yangtze River Delta, Guangdong‑Hong Kong‑Macao Greater Bay Area, Chengdu‑Chongqing) focus on large‑scale, real‑time demand, while western hubs (Guizhou, Inner Mongolia, Gansu, Ningxia) leverage abundant renewable energy and lower costs to provide non‑real‑time capacity, reshaping China’s digital geography.

The policy‑driven combination of measures has yielded impressive results: by the end of 2024, China’s total computing capacity reached 280 EFLOPS (a 22 % YoY increase) and data production hit 41.06 ZB (a 25 % YoY rise).

3. Significant Outcomes: Scale Growth and Layout Optimization

High‑density, tightly coordinated policy packages have driven rapid scale expansion and more efficient regional layout, as reflected in the statistical charts below.

4. Full Industry‑Chain Panorama

The computing‑power industry chain consists of upstream infrastructure and equipment supply, mid‑stream data‑center construction and operation, and downstream application deployment.

(1) Upstream – Domestic Chip Substitution

U.S. export controls have intensified since 2019, culminating in a 2024 ban on 24 semiconductor‑manufacturing tools and three software tools, as well as a prohibition on high‑bandwidth memory (HBM) for AI chips. This pressure accelerates the domestic development of AI chips such as Huawei’s Ascend series, Shanghai‑based MuXi Integrated Circuits, and Beijing‑based Moore Threads.

(2) Mid‑stream – Computing‑Power Services Boost Market Scale

According to the China Academy of Information and Communications Technology’s 2024 report, the market is dominated by three telecom operators, dedicated computing‑power service providers, and cloud vendors. IDC forecasts an 18.9 % CAGR through 2027, reaching RMB 3,075 billion.

(3) Downstream – “Compute+” Enables Digital Economy

The ultimate value of the computing‑power industry lies in empowering thousands of industries, driving digital transformation and intelligent upgrades across government, finance, manufacturing, and more.

5. Conclusion and Outlook

China’s explosive growth in computing power, driven by forward‑looking national strategy and sustained policy incentives, has turned the sector into a strategic pillar. “East‑Data‑West‑Compute” optimizes resource allocation, green low‑carbon goals guide development, and inter‑regional connectivity sketches the future landscape. Under policy pressure, domestic chips are breaking through, mid‑stream services are flourishing, and downstream “compute+” applications are taking root across sectors, showcasing massive potential for digital‑economy growth.

Looking ahead, challenges and opportunities coexist: domestic chips must continue to overcome advanced‑process and ecosystem barriers; green‑low‑carbon targets require industry‑wide cooperation; standards for inter‑connectivity are essential for a unified national compute network; deeper regional collaboration will maximize “East‑Data‑West‑Compute” benefits; and expanding application scenarios will further unlock computing‑power value.