Data Center Construction Market in China Trends and Forecast
The future of the data center construction market in China looks promising with opportunities in the BFSI, IT and telecommunications, government and defense, and healthcare markets. The data center construction market is expected to reach an estimated $72.3 billion by 2031 with a CAGR of 5.8% from 2025 to 2031. The data center construction market in China is also forecasted to witness strong growth over the forecast period. The major drivers for this market are rising data usage and the increasing need for cloud computing among enterprises, growing dependence on e-commerce systems, which call for powerful data processing and storage capabilities, along the growing utilization of Internet of Things (IoT) devices.
• Lucintel forecasts that, within the data center category, large-scale data centers will remain a larger segment over the forecast period due to their ability to handle multiple clients and a variety of computing requirements.
• Within the end use category, IT and telecommunications will remain the largest segment due to the exponential rise in data consumption, increasing cloud adoption, and the expansion of digital infrastructure.
Emerging Trends in the Data Center Construction Market in China
With the rapid development of digitization and the increasing provision of digitalized data services in China, the data center construction market within China is booming. For example, expanding ChinaÄX%$%Xs digital economy requires new, efficient, scalable, and green data infrastructure solutions. Emerging trends such as advancing AI integration, advancing sustainable construction practices, and expanding cloud services in China are positioned to influence the evolution of the industry. These trends are driving demand for state-of-the-art facilities that support ChinaÄX%$%Xs growing data storage, processing, and computational needs.
• AI-Powered Data Centers: Artificial Intelligence (AI) is increasingly being integrated into the design and operation of data centers in China. AI-driven management systems are enhancing energy efficiency, automating operations, and optimizing the physical space within facilities. These AI solutions help data centers predict equipment failures better, automate cooling systems, and balance workloads in real-time, improving overall operational efficiency. AI in data centers is changing how facilities are designed and operated, creating smarter and more sustainable data infrastructure.
• Sustainability and Green Design: Sustainability is now a central focus in data center construction, as China has committed to carbon neutrality by 2060. Developers are incorporating energy-efficient technologies such as liquid cooling, renewable energy sources, and environmentally friendly building materials to reduce carbon footprints. Green building certifications like LEED (Leadership in Energy and Environmental Design) are becoming standard, driving the construction of data centers that operate with minimal environmental impact. This shift is contributing to the creation of sustainable and future-proof data centers across China.
• Cloud Data Centers: The growth of cloud computing is driving the expansion of data center construction in China. Major cloud service providers like Alibaba, Tencent, and Huawei are investing heavily in infrastructure, and the demand for data center facilities is growing rapidly. This trend is being driven by the shift from on-premises IT solutions to cloud-based services for both businesses and consumers. To meet this increasing demand, developers are establishing larger data centers with greater capacity. These data centers can sustain cloud operations and provide flexibility for future scalability.
• Development of Edge Data Centers: The construction of edge data centers is increasing in China due to growing demand for faster, low-latency data processing. Through edge computing, data is processed near the end user. Edge computing helps eliminate latency and bandwidth use. In China, the rise of IoT, autonomous vehicles, and smart cities is creating an increasing demand for localized data centers that can handle these technologies. Edge data centers enable faster data processing, improve application performance, and enhance real-time analytics, particularly in urban areas with high population density.
• Hybrid Cloud and Colocation Services: The growth of colocation services and hybrid cloud data centers in China is driven by the shift toward hybrid IT solutions. Businesses are increasingly adopting hybrid cloud models to balance on-premises infrastructure with cloud-based services. Data centers offering both colocation services and cloud hosting are becoming more common as companies seek flexible, scalable, and cost-effective solutions. This trend is reshaping the landscape of Chinese data centers into more adaptable structures that meet varied business requirements.
Emerging trends in the Chinese data center construction market, such as AI-powered operations, sustainability initiatives, the rise of cloud services, edge computing, and growth in hybrid infrastructure in the cloud, are largely remodeling the industry. These trends are propelling the development of more efficient, sustainable, and business- and consumer-friendly data centers. As China remains committed to further developing its digital infrastructure, these trends will continue to be key factors in determining the future direction of the data center construction market.
Recent Developments in the Data Center Construction Market in China
The data center construction market in China is witnessing a revolutionary transformation as digital services continue to expand rapidly. The government’s push for greater technological innovation and investment in digital infrastructure has led to the rise of key developments in the sector. Companies and service providers are investing in larger and more sophisticated facilities to meet increasing demand. Trends such as cloud expansion, edge computing, and sustainable building practices are all part of the evolving data center ecosystem in China.
• Government Support for Digital Infrastructure: The Chinese government is actively promoting the development of data centers as part of its national strategy to strengthen digital infrastructure. Initiatives such as the 14th Five-Year Plan emphasize investment in high-tech industries, including data centers. The governmentÄX%$%Xs focus on digital infrastructure is expected to drive the construction of modern, scalable data centers that can support growing data demand in sectors like AI, IoT, and e-commerce. This development is ensuring that China has the necessary infrastructure to remain competitive in the global digital economy.
• Increasing Demand for Data Storage: The demand for data storage is increasing exponentially across all sectors, especially in e-commerce, finance, and cloud services. The rise in internet traffic, big data analytics, and AI applications is generating massive volumes of data, requiring secure and reliable storage solutions. This is increasingly driving the need for data centers capable of housing large amounts of storage. In response, ChinaÄX%$%Xs construction market has seen the building of larger storage facilities with enhanced security measures to address these requirements.
• Building of 5G Networks: The rollout of 5G networks in China has prompted significant investments in data center infrastructure. With faster internet speeds and low-latency capabilities, 5G is expected to support innovations in autonomous vehicles, smart cities, and other IoT applications. Data centers are essential to process the massive amounts of data generated by these technologies, and their construction must align with the demands of 5G infrastructure. This trend is pushing developers to design data centers that support the specific needs of 5G applications and deliver high-speed services.
• Adoption of Modular Data Centers: Modular data centers are becoming more popular in China due to their flexibility, cost-effectiveness, and speed of deployment. The modular units can be rapidly constructed and easily scaled, making them perfect for expanding infrastructure where long construction periods are undesirable. The use of modular data centers is becoming increasingly common, especially in regions with a pressing need for rapid growth. These modular facilities help businesses meet their need for timely data processing while conserving capital investment.
• Technological Upgrades in Cooling Systems: With the increase in data center power, managing energy consumption and cooling efficiency is one of the major challenges. In this regard, technological upgrades in cooling systems are integrated into the construction of data centers in China. Technologies such as liquid cooling and free cooling reduce energy consumption and allow data centers to operate sustainably. The development of more efficient cooling technologies is becoming a key part of the design process for new data centers, enabling them to meet both operational and environmental targets.
Recent developments in China’s data center construction market, including government investment, increasing demand for storage, the integration of 5G, modular designs, and advancements in cooling technologies, are reshaping the industry. These developments will foster larger, more efficient, and technologically advanced data centers to support the fast-growing digital economy. Continued investments in digital infrastructure in China mean these developments will further consolidate ChinaÄX%$%Xs leadership in technology and data processing on the world stage.
Strategic Growth Opportunities for Data Center Construction Market in China
The Data Center Construction market in China is characterized by various growth opportunities driven by rapid technological advancement and the digital transformation of the country. In light of increased demand for data storage, processing, and networking services, multiple sectors are contributing to the development of more sophisticated and sustainable data centers. These include applications such as cloud services, AI, and 5G, which are pushing the market toward innovation and expansion.
• Cloud Computing Growth: Cloud computing is still one of the major growth drivers for data center construction in China. As companies shift to the cloud, the demand for data storage, processing, and management facilities has increased. Data centers must provide scalable, flexible solutions to meet the changing needs of cloud service providers and their customers. This growth opportunity is driving the construction of larger, more complex facilities to support multi-cloud and hybrid environments, leading to increased investment and infrastructure development across China.
• AI and Machine Learning Integration: The integration of AI and machine learning technologies into data centers is providing growth opportunities in the Chinese market. AI capabilities in data centers allow for more efficient operations, predictive maintenance, and energy management. As AI becomes an essential part of manufacturing, healthcare, and finance industries, data centers are designed to carry the high computational loads that support the execution of artificial intelligence algorithms. This is propelling investment in HPC infrastructures and gearing up the construction of advanced data facilities to enable AI-driven applications.
• Deployment of 5G and Edge Data Centers: The growth opportunity in the data center construction market in China arises from the rollout of 5G networks. 5G technology facilitates high-speed and low-latency communication, demanding that data be processed closer to the end-users. This calls for edge data centers, strategically located to process data at the edge of the network, reducing latency and improving performance. As 5G networks spread, more edge data centers will be needed to cater to this requirement, which means an increased deployment of distributed data centers in urban and suburban areas.
• Internet of Things (IoT) Expansion: The expansion of the Internet of Things in China is another major growth opportunity for the data center construction market. IoT devices create huge volumes of data that must be processed and stored efficiently. This has resulted in the design of data centers with a high information load capacity offering real-time processing capabilities. High connectivity and strong security in data centers, with the ability to store huge amounts of data, are among the major requirements for IoT solutions offered by sectors such as transport, healthcare, and manufacturing, leading to construction.
• Sustainability and Green Data Centers: In light of ChinaÄX%$%Xs efforts to meet environmental goals, sustainability is becoming a core concern for the data center construction industry. There is an increased demand for green data centers using renewable energy and energy-efficient designs. Builders have started adopting LEED standards for green building and innovative cooling technologies to reduce the carbon footprints of data centers. This trend toward sustainability is both aligned with government regulations and driven by the increasing demand for eco-friendly and energy-efficient infrastructure in the digital economy.
The strategic growth opportunities in the China Data Center Construction market include growth in cloud computing, integration of AI, the rollout of 5G and edge data centers, growth in IoT, and an emphasis on sustainability. The future for the data center industry is now in the form of more innovative, efficient, and scalable infrastructure, and China is leading in terms of technological advancements and digital transformation.
Data Center Construction Market in China Driver and Challenges
A combination of technological progress, economic change, and regulatory developments influences the Data Center Construction market in China. The factors of drivers versus challenges help define the future of the market. Key drivers include technological innovation, the need for more storage, the growth of cloud services, government support, and sustainability trends. On the contrary, challenges include energy consumption, regulatory pressure, and demands for skilled labor to ensure sustained growth in this sector.
The factors responsible for driving the Data Center Construction market in China include:
• Technological Innovation: Technological innovation remains one of the primary driving forces for the data center construction market in China. AI, cloud computing, and 5G are evolving, giving rise to the demand for more advanced and high-capacity data facilities. These technologies support better operations, proper data management, and improved services, driving the construction of new data centers. The evolution in technology is creating a dependency on infrastructure that will support the future of digital services in China.
• Increasing Demand for Data Storage: As the digital economy grows, so does the need for data storage across various industries. With the proliferation of cloud services, IoT devices, and digital platforms, China is experiencing an explosion in data creation. Such high demand creates a need for more data centers that can store, process, and secure large volumes of information. This increasing demand for data storage propels the construction of larger, more robust facilities to meet the growing needs of businesses and consumers across the country.
• Expansion of Cloud Services: Cloud services are experiencing exponential growth in China, driven by both enterprise adoption and consumer usage. Companies are migrating their infrastructure to the cloud to benefit from scalability, cost efficiency, and flexibility. This shift is driving the demand for new data centers, especially those that support multi-cloud environments. Major growth drivers in the data center construction sector include the construction of data centers by cloud service providers in key locations across China to meet the needs of their clients.
• Government Initiatives and Investment: The Chinese government is also a key player in supporting the growth of the data center construction industry. The government is developing modern data centers to support the countryÄX%$%Xs digital economy through strategic initiatives and investments in digital infrastructure. Policies, including the 14th Five-Year Plan, focus on innovation and digitalization, promoting investment in data center infrastructure. Government support with subsidies and tax incentives is making the environment very favorable for the construction of new data centers across the country.
• Sustainability and Green Energy: Sustainability is increasingly becoming important in the construction of data centers in China. The governmentÄX%$%Xs commitment to reducing carbon emissions and promoting green energy is driving the adoption of environmentally friendly practices in the construction and operation of data centers. Builders are focusing on energy-efficient designs, renewable energy sources, and cooling technologies that reduce the environmental impact of data centers. This focus on sustainability ensures that the data center market aligns with the countryÄX%$%Xs long-term environmental goals.
• Energy Consumption and Environmental Impact: This is one of the main challenges affecting the construction of data centers in China, presenting a high energy consumption challenge. Data centers consume massive amounts of power for their operations, especially with the growing demand for data. With the push by companies and governments to reduce their environmental impact, the need for energy-efficient solutions is increasing. The only way to overcome this challenge and still meet regulatory compliance is by implementing green technologies, such as liquid cooling and renewable energy sources.
Challenges in the Data Center Construction market in China are:
• Regulatory Challenges and Data Security: Regulatory challenges are another major issue the data center construction market in China faces. The government has strict data protection laws, such as the Cybersecurity Law, that require data centers to meet specific compliance standards. Ensuring data security and compliance with these regulations is crucial for data center operators. Data centers must invest in robust security infrastructure to protect against cyber threats and adhere to government regulations, which can increase costs and complexity in construction and operations.
• Skilled Labor Shortage: A major challenge is the shortage of skilled labor in the construction and operations sector of a data center. With an increased demand for new data centers, there is a greater need for specialized workers such as engineers, technicians, and project managers. Investment in training and development programs is necessary for the industry to overcome this gap. This shortage may slow down the pace of data center development in the country.
The major drivers and challenges affecting the Data Center Construction market in China, including technological innovation, demand for storage, cloud services, government support, sustainability efforts, energy consumption, regulatory compliance, and skilled labor shortages, are all influencing the future direction of the market. These factors are both opportunities and challenges, which will drive how the industry moves forward in the future. These hurdles, along with these drivers, need to be addressed for sustained growth in ChinaÄX%$%Xs data center infrastructure.
List of Data Center Construction Market in China Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies, data center construction companies cater to increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the data center construction companies profiled in this report include:
• Company 1
• Company 2
• Company 3
• Company 4
• Company 5
• Company 6
• Company 7
• Company 8
• Company 9
• Company 10
Data Center Construction Market in China by Segment
The study includes a forecast for the data center construction market in China by size of data center and end use.
Data Center Construction Market in China by Size of Data Center [Analysis by Value from 2019 to 2031]:
• Small and Medium-scale Data Center
• Large-scale Data Center
Data Center Construction Market in China by End Use [Analysis by Value from 2019 to 2031]:
• BFSI
• IT and Telecommunications
• Government and Defense
• Healthcare
• Others
Features of the Data Center Construction Market in China
Market Size Estimates: Data center construction in China market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends and forecasts by various segments.
Segmentation Analysis: Data center construction in China market size by size of data center and end use in terms of value ($B).
Growth Opportunities: Analysis of growth opportunities in different size of data centers and end uses for the data center construction in China.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the data center construction in China.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
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FAQ
Q1. What are the major drivers influencing the growth of the data center construction market in China?
Answer: The major drivers for this market are rising data usage and need for cloud computing among enterprises, growing dependence on e-commerce systems, which calls for powerful data processing and storing capacities, along with increasing utilization of the internet of things (IoT) devices.
Q2. What are the major segments for data center construction market in China?
Answer: The future of the data center construction market in China looks promising with opportunities in the BFSI, IT and telecommunications, government and defense, and healthcare markets.
Q3. Which data center construction market segment in China will be the largest in future?
Answer: Lucintel forecasts that large-scale data center will remain the larger segment over the forecast period because they are designed to handle several clients and a variety of computing requirements.
Q4. Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.
This report answers following 10 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the data center construction market in China by size of data center (small and medium-scale data center and large-scale data center) and end use (BFSI, IT and Telecommunications, government and defense, healthcare, and others)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.4. What are the business risks and competitive threats in this market?
Q.5. What are the emerging trends in this market and the reasons behind them?
Q.6. What are some of the changing demands of customers in the market?
Q.7. What are the new developments in the market? Which companies are leading these developments?
Q.8. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.9. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.10. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
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