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China's booming data center ecosystem has played a significant role in the country's quick and steady rise towards becoming a global technological powerhouse.

A recent report by analysts at Mordor Intelligence shows a compound annual growth rate (CAGR) of 35.57% over the forecast period (2023-2028). It is anticipated that the size of the China Internet Data Center Market will increase from $64.01 billion in 2023 to $293.15 billion by 2028. The key players in the China data center market include China Telecom Corporation Ltd., Chindata Group Holdings Ltd., Equinix, Inc., Space DC Pte Ltd. and Zenlayer Inc.

The COVID-19 pandemic heightened this demand as data consumption increased during lockdown. Strict quarantine regulations in China, like in many other countries worldwide, caused many people to rely on online shopping, among other essential daily activities. Mordor Intelligence claims that as more people connected remotely for both business and entertainment purposes at home, the online market also experienced tremendous growth. It is believed that video streaming, e-commerce, games and other sectors will maintain their post-pandemic strength in the Chinese market, and the associated surge in data usage is expected to continue.

Factors Influencing China's Data Center Market

Adoption of cloud computing

Cloud computing improves the efficiency of data processing on multiple compute and storage systems, where availability is performed over the internet. The adoption of cloud computing has also remarkably changed the way businesses operate by providing scalability and flexibility.

As time progresses and technology advances, more organizations and businesses are moving to the cloud to more easily access data, improve collaboration and reduce costs. To this end, data centers have become an integral part of the business model. Data centers act as the foundation for cloud services, allowing for the smooth deployment and administration of virtualized environments.

Development of the Internet of Things

The Internet of Things (IoT) is a collection of physical devices that can send and receive data between each other without any human input.

IoT is all about connecting devices, sensors and systems that share data and allow people to monitor and analyze it in real-time. It’s common knowledge that China is leading the way in transforming traditional cities into smart cities and traditional industries into smart factories. In this context, the number of IoT devices is sure to keep growing.

The Chinese industrial IoT market is estimated to be worth $55.76 billion in 2023. The more IoT devices there are, the greater the reliance on data centers for proper data storage, processing and analysis.

Increased usage of mobile devices

The growing popularity of mobile devices is yet another reason that data centers are in high demand. Mobile devices produce massive amounts of data that must be processed and stored somewhere. Many use mobile phones for e-commerce, entertainment and finance tasks. This surge in digital transactions, communication and interactions has resulted in an unprecedented amount of data being generated. As companies strive to streamline their operations and strengthen their customer experience, they will inevitably need the robust infrastructure that data centers provide.

As the world moves towards a data-centric future, data centers will continue to lead the way in technological innovation, enabling businesses and individuals to unlock the power of data for growth and innovation. With the assistance of several key partners, China is poised to become one of the major players in the international data center ecosystem, a position that will be supported by the continued development of a secure and cost-effective data center market in the country.

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