China formally launched its "East Data, West Computing" (EDWC) strategy in February 2022, an initiative outlined in an implementation plan from May 2021 to relocate energy-intensive artificial intelligence (AI) infrastructure from the eastern seaboard to its western and central regions. This national effort aims to balance the distribution of computing facilities, boost inland economies, and strengthen China's AI leadership.

This strategy is a significant national undertaking designed to secure China's leadership in artificial intelligence and reshape its economic geography. It affects the availability of computing resources, local economies in rural areas, and global competition in AI development.

A National Computing Overhaul

The EDWC strategy, a joint initiative of the National Development and Reform Commission (NDRC), the Cyberspace Administration of China (CAC), the Ministry of Industry and Information Technology (MIIT), and the National Energy Administration (NEA), was formally launched in February 2022. The plan for this strategy, titled "Implementation Plan for Computing Hubs of the National Integrated Big Data Center Collaborative Innovation System," was issued in May 2021. The core objective is to leverage abundant land, cooler climates, and renewable energy resources in the western regions. This approach is intended to decentralize computing power, which Beijing views as essential to national competitiveness in the AI era.

Relocating AI Power

Tech giants like Huawei, Tencent, and Alibaba are actively involved in building large-scale data centers as part of this initiative. In Guizhou province, a cluster of European-style buildings houses Huawei's largest data center, part of dozens constructed in the region. Another example is an Alibaba and China Telecom data center in Shaoguan, which contains 10,000 of Alibaba's Zhenwu semiconductors, promoting self-sufficiency in AI hardware. Inner Mongolia is also a key location, with 20 of China's 30 leading private computing companies operating there, and its computing power totaling 315,000 petaflops as of May 2026, with 297,000 petaflops dedicated to AI. China's overall intelligent computing capacity increased by 177 percent year-on-year by the end of June this year, reaching 2,185 EFLOPS.

Local Opportunities and Economic Strain

Local governments recognize data centers as a key investment opportunity to generate revenue from low-productivity land. Residents in areas like Guian New Area, where Huawei's data center is located, have noted improved transportation, increased trade, and new business opportunities. Shopkeeper Shu Peihua stated, "It used to be a barren mountain, but since the area has developed, transportation has become more convenient, trade has picked up, business opportunities have emerged". Another local, Li, noted that "All the villagers in our neighborhood now find jobs nearby". However, researchers point out that wage growth in Guizhou has lagged behind the national average despite GDP expansion. The province also carries one of China's heaviest debt burdens. Digital infrastructure development can also widen the urban-rural income gap, as innovation resources concentrate in urban areas.

What We Could Not Confirm

We could not confirm the precise number of new jobs directly created for local residents by these data center projects. The overall long-term economic gains for host regions, beyond initial infrastructure development, remain unclear, particularly concerning wage growth and the urban-rural income gap.