Mainland China’s data center market is evolving rapidly. As investors and developers invest/further invest, there are many themes, topics, and issues to consider. In our report we look at four key points and they are:
- The market
- Government policy
- Investment
- Environmental sustainability
The Market
At the beginning of 2021, cabinet stock in mainland China touched 3.6 million, with the anticipation that this number will surpass 4 million by the end of the year/beginning of 2022.
The Beijing-Tianjin-Hebei region, the Yangtze River Delta region and the Pearl River Delta region continue to maintain strong data center construction impetus, both in terms of the number of new cabinets and aggregate inventory.
Government Policy
One of the most important data center industry-related policies released recently in mainland China is The Three-year Action Plan for New Data Centre Development (2021-2023). The basic actions of the plan are:
- Optimization of construction layout
- Upgrading of network quality
- Enhancement of computing power
- Strengthening of the industrial chain
- Green and low-carbon development
- Safety and reliability
Investment
Domestic data center financing conduits in mainland China are varied. They are largely split into equity financing and debt financing, including public offering, rights issue, private placement, bond financing, bank loans and other instruments.
Given the appealing cap rate that data center projects can offer, many investors of late have paid much attention to data center properties in China. These investors have executed on investment deals via a number of methods, such as directly purchasing data center property assets, forming a joint venture company, or utilizing financing channels.
Sustainability
In the face of global warming, mainland China has propositioned the strategic goal of "reaching a carbon peak by 2030 and going carbon neutral by 2060." Data centers, on the other hand, transform electricity into computing power, and so with the swift growth of digital demand, data centers are progressively requiring a greater amount of electricity for center operational purposes.
