China's 14th Five Year Plan and what it means for data centers

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The Chinese Government's 14th Five Year Plan could see more data centers built, more focus on green initiatives, and more domestic chip manufacturing

www.datacenterdynamics.com, Oct. 12, 2021 – 

As one of the largest and most powerful economies in the world, China's areas of focus should be of interest to companies globally.

In its latest Five Year Plan, the Chinese Government has outlined a number of priority areas that could have an impact on both the domestic and global landscape with regards to data centers, semiconductors, and related infrastructure.

What is in China's 14th Plan?

Based on a practice adopted from the Soviet Union, the Chinese Communist Party (CCP) regularly releases new economic plans every five years. The latest (14th) Plan runs from 2021 to 2025. Amongst other longer-term goals, it aims to make China a "moderately developed" economy by 2035.

The 14th Plan doesn't have policies or objectives specifically for data centers – though there is a separate policy document for the sector which we'll discuss later. But the Plan has a direct effect on real estate, investment, energy, and IT, which all feed into the data center realm.

"China is pledging innovations combining political ecology and digital economy to handle climate change in pursuing an upgraded commitment to the Paris Agreement," explained a policy brief from French economic research agency, the Center for Prospective Studies and International Information (CEPII). "For this ultimate goal, R&D spending is being strategically reinforced."

The 14th Plan builds on the foundations laid by the 13th; a greater focus on domestic R&D and manufacturing, expanding the middle class, and strengthening the local economy.

"Technologically, on the supply side, the 14th Plan envisages self-reliance in critical technologies, despite the economic cold war with the US," added CEPII. "China's Fifth Plenum in October 2020 [a precursor event to define the objectives of the 14th Plan] emphasized the importance of scientific and technological self-reliance linked to the strong domestic market. The higher R&D spending will be directed to strategic sectors such as biotechnology, semiconductors and new energy vehicles, to progress towards self-sufficiency."

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