China Data Center Market - Investment Analysis & Growth Opportunities 2026-2031
China Data Center Market Size, Share, Trends, & Investments By IT Infrastructure, Electrical Infrastructure, Mechanical Infrastructure, Cooling Systems, General Construction, & Tier Standard.
China Data Center Market Size and Share
| MARKET SIZE (INVESTMENT) | USD 101.47 Billion (2031) |
| MARKET SIZE (AREA) | 16.35 Million Sq. feet (2031) |
| MARKET SIZE (POWER CAPACITY) | 4,420 MW (2031) |
| CAGR - INVESTMENT (2025-2031) | 8.94% |
| HISTORIC YEAR | 2022-2024 |
| BASE YEAR | 2025 |
| FORECAST YEAR | 2026-2031 |
| MAJOR PLAYERS | CiscoDell TechnologiesHewlett-Packard EnterpriseHuawei TechnologiesIBMInspur Group |
China Data Center Market Size Analysis
The China data center market size was valued at USD 60.69 billion in 2025 and is expected to reach USD 101.47 billion by 2031, growing at a CAGR of 8.94% during the forecast period. China is one of the well-established data center markets in the APAC region that is witnessing rapid data center growth year-on-year, fuelled by multiple growth factors, such as, continuous advancements in Artificial Intelligence and Machine Learning, surge in cloud computing adoption, expansion of sub-marine and inland cables, rising demand for digitalization, government support for data centers, strict data regulation laws, adoption of sustainability measures among data center operators and cloud companies, and other growth factors.
Owing to the rapid surge in demand for processing Artificial Intelligence workloads, data center companies are increasing rack power densities and investing to install advanced liquid cooling techniques and clusters of Graphic Processing Units in their data centers to support Artificial Intelligence workloads efficiently. For instance, in September 2025, Alibaba Group supplied more than 23 thousand domestically manufactured Graphic Processing Units to China Unicom to install in its Xining data center facility in Qinghai province of China. The demand for advanced graphics processing units is slated to increase significantly in the China data center market during the forecast period.
The Cumulative power capacity of the China data center market from 2026 to 2031 is anticipated to reach around 21,600 MW, growing with an absolute growth rate of around 81.15% from 2025 to 2031.
The major cloud service providers like Alibaba Group, Huawei, and others are continuously investing in China to expand their cloud and Artificial intelligence service offerings across the country. For example, in September 2025, Alibaba Group secured a fund of around $3.2 billion to expand the company’s data centers, cloud computing, and other digital capabilities. The demand for cloud computing services is increasing rapidly across China as businesses across a wide range of industries are shifting their workloads to cloud platforms for better efficiency. For example, in August 2025, the World Aquatics Organization, that specializing in organizing water sports competitions, collaborated with Alibaba Group to migrate its core systems to Alibaba Group’s cloud platform to enhance operational efficiency and boost productivity.
China hosts around 22 Free Trade Zones across multiple provinces, including Fujian, Guangdong, Henan, Sichuan, Shaanxi, Tianjin, Zhejiang, and other provinces, to support enterprises across multiple sectors by offering a wide range of advantages for establishing and operating their businesses efficiently across the country. The Free Trade Zones in China offer enterprises, including data center operators, simplified customs and business-registration procedures, financial liberation measures like free-trade accounts and cross-border RMB flexibility, tax incentives for high-tech industries, and other benefits.
China controls personal and sensitive data through several laws, including the Personal Information Protection Law, Data Security Law, and Cybersecurity Law, which sets clear rules on how data should be collected, stored, used, and shared; these laws also give people rights over their personal data and require companies to follow strong security practices, regularly check risks, obtain government approval before sending data outside the country, and report any major data security issues on time.
CHINA DATA CENTER MARKET SIZE BY AREA
The China data center market by area is expected to reach 16.35 million sq ft by 2031, driven by the expansion of data center development across key provinces. Beijing, Fujian, Guangdong, Guizhou, Hainan, Hebei, Hunan, Ningxia, Shandong, and Shanghai are among the primary data center hubs, while Jiangsu, Anhui, Guangxi, Inner Mongolia, Sichuan, Shaanxi, Zhejiang, and other provinces are also gaining momentum. This expansion is expected to increase demand for commercial land, particularly as colocation and hyperscale operators continue investing in large-scale data center facilities across China.
Commercial land prices vary significantly across provinces in China. As of 2025, the cost of commercial land in Beijing ranged between $190 and $354 per square meter, while it ranged between $187 and $234 per square meter in Shanghai. Commercial land prices in Beijing, Shanghai, Shenzhen, and Tianjin are comparatively lower than in special administrative regions (SARs) such as Hong Kong and Taiwan. The cost of commercial land in China is expected to increase gradually during the forecast period as colocation and hyperscale companies continue investing in large-scale data center facilities, increasing demand for commercial land across the country.
CHINA DATA CENTER MARKET SIZE BY POWER CAPACITY
The China data center market by power capacity is expected to reach 4,420 MW by 2031. As of 2025, the cost of commercial electricity in China ranged between $0.10 and $0.15 per kWh. The commercial electricity price in China is expected to increase in the upcoming period as the country is witnessing the development of numerous large-scale ready data centers that will require huge amounts of electricity. The demand for artificial intelligence services is increasing rapidly in China, which will also increase the demand for AI-ready data centers; therefore, the demand for commercial electricity will also increase in China.
The Green Data Center Government Procurement Demand Standard mandates that data center operators ensure the PUE of data centers, which have been designed since June 2023, does not exceed 1.4. It also mandates data center companies to gradually increase the share of renewables for powering data center operations. According to this standard, all data centers must leverage at least 30% of renewable energy to power data centers, and it should be increased to 100% by 2032.
Key Report Takeaways
- Facility Type - The colocation data center segment accounted for the largest market share of around 70% in 2025.
- IT Infrastructure - The server infrastructure dominates the China data center market with the largest share of 52% in 2025.
- Electrical Infrastructure - The uninterruptible power supply (UPS) systems accounted for the largest market share in 2025.
- Mechanical Infrastructure - In 2025, cooling systems dominated the China data center market with the largest share.
- General Construction - The core & shell development segment accounts for over 29% of the China data center market.
- Tier Standard - The Tier IV segment is expected to witness significant growth, recording the fastest CAGR during the forecast period.
Note: Market size and forecast figures are generated using Arizton's proprietary estimation framework, based on facility-level primary and secondary research, updated as of the current reporting cycle.
China Data Center Market Trends and Drivers
TRENDS
| Trends | Impact (2025) | Geographic Presence | Impact (2031) |
|---|---|---|---|
| TEST | China |
Rapid Expansion of Artificial Intelligence Technologies in China
The rapid adoption of artificial intelligence in China is becoming one of the key factors driving data center investments, as AI applications require massive advanced data center facilities to process and store AI workloads.
Businesses across a wide range of sectors, including finance, automotive, healthcare, retail, manufacturing, education, and other sectors, are increasingly relying on artificial intelligence, which is increasing the demand for massive data centers to analyse, process, and store huge volumes of data efficiently.
Data center operators are investing in developing AI-ready data centers, which are equipped with high-density racks, advanced cooling technologies, high power capacities, and GPU clusters to address the growing demand to process AI workloads in China. The development of AI-ready data centers is expected to increase significantly in China in the forthcoming years.
In October 2025, China’s National Development and Reform Commission and the National Energy Administration announced plans to integrate artificial intelligence into the energy sector to increase efficiency, increase renewable energy production, and position China as one of the global leaders in AI-driven energy applications by 2030.
Adoption of Renewable Energy and Sustainability Practices among Data Centers
The adoption of renewable energy and sustainability practices among data center operators is increasing rapidly in China, as data center firms are increasingly focusing on building environmentally friendly data center facilities to reduce their carbon emissions. Data center firms are adopting a wide range of sustainability practices, including integrating renewables to power data center operations, installing liquid cooling technologies, replacing diesel generators with HVO-powered generators, and other practices to promote sustainability across data centers.
In April 2026, GDS Holdings, a Chinese data center company, initiated the replacement of diesel generators in its Chinese data centers with Hydrogenated Vegetable Oil (HVO) power generators to enhance sustainability.
The adoption of sustainability practices among data center operators will also help companies to reduce their operational costs. We expect the adoption of sustainability practices among data center operators will further increase over the next three to five years.
RESTRAINTS
Business Ownership Challenges and Requirement for Skilled Workforce
China’s data center industry is growing rapidly, fueled by increasing digitalization, artificial intelligence adoption, and government initiatives such as Eastern Data, Western Computing. However, the data center growth is being hampered by several challenges, such as business ownership hurdles and a shortage of skilled workforce.
The government of China imposes non-tariff barriers on foreign data center investors in the form of licensing restrictions in China that create hindrances for data center players from other countries to own businesses in the country.
In previous years, foreign companies had to face strict rules for owning and operating data centers in China. According to the rental data center model, companies require the Internet Data Center (IDC) license to lease IT facilities, and foreign companies were not allowed to hold the IDC license, which means international data center companies were not directly able to own and lease IT infrastructure in China. Foreign investors were prohibited from directly operating data centers or other value-added telecommunications services (VATS), as it was very difficult for foreign companies to obtain the IDC license.
Disrupted Supply Chain hinders Growth Potential
China’s data center industry is experiencing rapid growth; however, despite the strong demand for digital infrastructure, the data center industry in China is facing significant challenges due to disrupted supply chains, which are slowing down the construction and operations of data centers.
Modern data centers require a wide range of critical components, including high-performance servers, storage systems, networking equipment, cooling & HVAC systems, backup power systems, and other components. Most of these components are sourced from both domestic and international suppliers. The escalating supply chain challenges are leading to increased construction timelines and slowing down data center growth in the country.
In recent years, global semiconductor shortages, rising component costs, and shipping delays have increased hurdles for Chinese data center companies to develop new data centers and to expand the existing facilities in the country. Even if the critical equipment is available, delays in transportation and port congestion can postpone project timelines by several months.
Segment Analysis
BY FACILITY TYPE: COLOCATION REMAINS THE DOMINANT
The colocation data center segment accounted for the largest market share of around 70% in 2025. Colocation data center companies in China are rapidly expanding their facilities to meet the surging demand for digital services in the country. They are increasingly developing large-sized data centers across major cities of China. Mega-scale colocation campuses are being developed to support cloud, artificial intelligence, and high-performance computing workloads. The rapid data center expansion is driven by China’s accelerating digitalization and internet penetration.
The China data center market has a presence of several local colocation service providers such as China Telecom Corporation, China Mobile International, China Unicom, Chayora, GDS Holdings, Keppel Data Centres, BDx Data Centers, among others.
For instance, in September 2025, China Unicom collaborated with Alibaba Group and other Chinese companies to procure around 23,000 domestically manufactured AI chips for the development of a massive data center in Xining, Qinghai Province, highlighting the growing investment in AI-ready infrastructure and supporting the expansion of large-scale colocation facilities in China. The rapid data center expansion is driven by China’s accelerating digitalization and internet penetration.
BY IT INFRASTRUCTURE: SERVER INFRASTRUCTURE LEADS
The server infrastructure dominates the China data center market with the largest share of around 52% in 2025. The rise in digitalization, increasing adoption of cloud computing and artificial intelligence among enterprises and individuals, and growing internet penetration are driving demand for advanced server infrastructure across the country.
For instance, Lenovo delivered its ThinkSystem SR650 V2 servers to Jiangsu Province Geriatric Hospital to modernize its data center, strengthen data protection, and improve digital services such as electronic medical records and e-prescription services. Such deployments highlight the growing adoption of advanced server infrastructure across China’s healthcare and other end-user sectors, supporting the overall growth of the server segment.
BY ELECTRICAL INFRASTRUCTURE: UPS SYSTEMS DRIVE POWER RELIABILITY
The uninterruptible power supply (UPS) systems accounted for the largest China data center market share in 2025. UPS systems can be categorized by topology into standby, line-interactive, and double-conversion systems, and by battery type into VRLA-based, lithium-ion, and flywheel UPS systems. In China, demand for UPS systems is increasing with rising investments in data center infrastructure, while operators are expected to increasingly adopt lithium-ion batteries over traditional lead-acid UPS systems to improve energy efficiency and sustainability.
For instance, China Mobile International invested in installing around 22 modular UPS systems, each delivering approximately 400 kVA with an N+1 redundancy configuration, at its Yangtze River Delta (Suzhou) data center. Such investments in modular and redundant UPS infrastructure are strengthening power reliability and supporting the expansion of high-availability data centers in China.
BY MECHANICAL INFRASTRUCTURE: COOLING SYSTEMS DRIVE DATA CENTER EFFICIENCY
In 2025, cooling systems dominated the China data center market with the largest share, as they are essential for managing the heat generated by IT infrastructure. These systems use air and water to maintain optimal operating temperatures, with commonly deployed cooling infrastructure including CRACs, CRAHs, chillers, cooling towers, condensers and dry coolers, economizers, evaporative coolers, and other cooling units.
In China, data center facilities deploy both water-based and air-based cooling systems, with most operators adopting N+1 or 2N redundant cooling configurations for Tier III facilities to ensure cooling reliability. For instance, China Unicom’s Tseung Kwan ‘O INNOPARK data center in Hong Kong is equipped with CRAC units and water-cooling systems, reflecting the growing adoption of advanced cooling infrastructure to support high-density IT workloads and improve data center efficiency.
BY GENERAL CONSTRUCTION: CORE & SHELL MARKET LEADER
In terms of general construction, the core & shell development segment accounts for over 29% of the China data center market and represents around 50% of total construction costs, followed by installation, design and engineering, project management, and commissioning services. The China market is dominated by greenfield construction and is increasingly witnessing the development of AI-ready data center projects. The on-site installation of power substations and renewable energy facilities, such as solar and wind power plants, is further expanding the scope of work for construction contractors.
For instance, MCC Group provided construction services to China Mobile International for the development of the Shuishui Data Center and Jiangnan Data Center in Chongqing, highlighting the continued demand for construction contractors as operators expand large-scale data center infrastructure across China. Data center construction costs in China are comparatively lower than in several other APAC countries, including Japan, Singapore, Indonesia, Malaysia, Australia, South Korea, and India.
BY TIER STANDARD
The Tier IV segment is expected to witness significant growth, recording the fastest CAGR during the forecast period. Tier IV data centers are equipped with a minimum 2N+1 redundancy across critical infrastructure, making them fault-tolerant and highly resilient. Most data centers in China are developed to Tier III specifications, with the flexibility to upgrade to Tier IV based on customer requirements.
In China, the Uptime Institute has awarded Tier IV accreditation to approximately 28 data centers operated by companies such as Agricultural Bank of China, Bank of Communications, ZhongYunXin Shunyi Data Technology Co., Centrin Data Group Co., Chengdu Aofei Intelligent Computing Technology Co., China Electronics Cloud Technology Company, China Minsheng Banking Corporation, and China Telecom, either for design documents or constructed facilities.
For instance, ZhongYunXin Shunyi Data Technology Co. received Uptime Institute Tier IV Certification for the design documents of its ZhongYunXin Shunyi IDC1 data center in Beijing, highlighting the growing focus on highly resilient and fault-tolerant data center infrastructure in China.
Competitive Landscape
The colocation data center companies contribute to generating the majority of the data center investments in China. Some of the prominent colocation companies operating in China include, aofei data international company, @hub, BDx Data Centers, CASIT Information Technology, China Communications Construction Company, Shijiazhuang Changshan Beiming Technology, Chayora, China Datang Corporation, China International Capital Corporation, China Mobile International, China Telecom Corporation, China Unicom, Chindata Group, Deheng Data, Digital Guangxi Group, Dr. Peng Telecom & Media Group, Fujian Douxun Technology, GDS Holdings, Heying Data, Hotwon Network Group, Kehua Tech, Keppel Data Centres, HAILANYUN Technology, Beijing Sinnet Technology, China Three Gorges Corp., Tianjin Jiangtian Data Technology, VNET Group, Zhejiang Hanggang Digital Technology, ZDATA Group, Hefei City Cloud Data Center, Henan Digital Zhongyuan Data, Volcano Cloud (Datong) Technology, and others.
The country also hosts major cloud service providers such as Alibaba Group, Baidu, Huawei, and others that operate multiple hyperscale data centers and cloud regions across Beijing, Chengdu, Chongqing, Guangzhou, Guiyang, Nanjing, Shanghai, Ulanqab, Wuhu, Wuhan, and others. The cloud market in China is anticipated to continue witnessing substantial growth during the forecast period. For instance, in September 2025, Alibaba Group planned to obtain a fund of around $3.2 billion to expand its cloud computing and data center service offerings across China.
China has the presence of global as well as local support infrastructure providers, which supply support infrastructure for resilient data center operations. Some of the prominent support infrastructure providers in China include ABB, AIRSYS, Baudouin, Carrier, Caterpillar, Cummins, Delta Electronics, EAST GROUP, Eaton, EVADA (Xiamen) Technology, Fuji Electric, Shenling, HITEC Power Protection, Hongbao Power Supply, INVT Power, Legrand, Mitsubishi Electric, Nanjing Jialitu Data Center Environment Technology, Piller Power Systems, Rittal, Rolls Royce, Schneider Electric, KSTAR, STULZ, Trane, Vertiv, and others.
The prominent IT infrastructure companies like Cisco, Dell Technologies, Hewlett Packard Enterprise, Huawei Technologies, IBM, Inspur Group, Lenovo, Everpure, Quanta Cloud Technology, Wiwynn, and others supply IT infrastructure, including servers, storage systems, and networking equipment for data centers in China.
Companies like AECOM, ATS Global, Aurecon, China Electronics Engineering Design Institute, China Railway Construction, China State Construction Engineering Corporation, DSCO Group, MCC Group, Zhejiang Cloud Valley, and others offer a wide range of construction, installation, commissioning, and engineering services for the construction of data centers in China.
China Data Center Industry Leaders
Disclaimer: Major players sorted in no particular order.
Recent Industry Developments
Table of Contents for China Data Center Industry Report
China Data Center Market Report Scope
By Infrastructure Type
- IT Infrastructure
- Electrical Infrastructure
- Mechanical Infrastructure
- Cooling Systems
- General Construction
By Tier Standard
- Tier I & II
- Tier III
- Tier IV
By Colocation Type
- Retail Colocation
- Wholesale Colocation
By Geography
- East China
- West China
- North China
- South China
Market Definition
| Term | Definition |
|---|---|
| PUE | Power Usage Effectiveness — total facility energy divided by IT equipment energy; values closer to 1.0 indicate higher efficiency. |
| Redundancy (N, N+1, 2N) | Design standards describing backup capacity for power and cooling components, ranging from no redundancy (N) to fully duplicated systems (2N). |
| CRAC / CRAH | Computer Room Air Conditioner / Air Handler — equipment used to regulate temperature and humidity in the server environment. |
| Hot Aisle / Cold Aisle | Rack layout convention that separates cool air intake from hot air exhaust to improve cooling efficiency. |
| Colocation (Retail / Wholesale) | Retail colocation serves capacity needs under roughly 250 kW; wholesale colocation serves capacity needs between 250 kW and 4 MW. |
Research Methodology
Identify Key Variables
Variables and factors are tested against historical facility-level market data through an iterative process.
Build a Market Model
Market-size estimations are built in nominal terms with a consistent average selling price across the forecast period.
Validate & Finalize
Market numbers and analyst calls are validated through an extensive primary research network across levels and functions.
Research Outputs
Syndicated reports, custom consulting assignments, and facility-level databases.
Facility-level depth
existing and upcoming facilities tracked across China.
Exclusive research
80% of Arizton reports are exclusive and first-to-market.
Trusted by leaders
200+ Fortune 500 companies rely on Arizton research.
24x7 availability
Continuous analyst and post-sale support.
Free customization
15–20% free customization on every license tier.
Key Questions Answered in the Report
How much MW of power capacity will be added across China during 2026-2031?
How big is the China data center market?
What factors are driving China data center market?
Which all geographies are included in China center market report?
Last Refreshed on : September 2026
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