China Data Center Market Analysis - Size and Forecast 2025-2029

China Data Center Market Size 2025-2029

The china data center market size is valued to increase USD 274.39 billion, at a CAGR of 38.3% from 2024 to 2029. Rising demand for hyper-converged data centers will drive the china data center market.

Major Market Trends & Insights

• By Component - IT infrastructure segment was valued at USD 18.69 billion in 2022
• By End-user - BFSI segment accounted for the largest market revenue share in 2022

Market Size & Forecast

• Market Opportunities: USD 1.00 billion
• Market Future Opportunities: USD 274.39 billion
• CAGR from 2024 to 2029 : 38.3%

Market Summary

• The market is experiencing significant growth and transformation, driven by the increasing demand for hyper-converged infrastructure and server disaggregation. According to a recent report, the market share of hyper-converged systems is projected to reach 30% by 2025, up from 15% in 2020. This trend is being fueled by the need to improve data center utilization rates and reduce complexity. Additionally, there is a growing focus on consolidating data centers to reduce operational costs and enhance efficiency. Core technologies, such as artificial intelligence and machine learning, are also playing a crucial role in driving innovation and optimizing data center operations.
• Despite these opportunities, the market faces challenges such as regulatory compliance and cybersecurity concerns. The Chinese government has implemented strict data protection regulations, which require data centers to adhere to stringent security standards. As the market continues to evolve, it is essential for businesses to stay informed of the latest trends and developments to remain competitive.

What will be the Size of the China Data Center Market during the forecast period?

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How is the Data Center in China Market Segmented and what are the key trends of market segmentation?

The data center in china industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

• Component
  • IT infrastructure
  • Power management
  • Mechanical construction
  • General construction
  • Others
• End-user
  • BFSI
  • Telecom and IT
  • Government
  • Energy and utilities
  • Others
• Geography
  • APAC
    • China

By Component Insights

The it infrastructure segment is estimated to witness significant growth during the forecast period.

The market continues to evolve, with a strong focus on energy efficiency and advanced IT infrastructure management. Companies are integrating predictive maintenance, liquid cooling technology, and airflow management to optimize network infrastructure and improve power usage effectiveness. Cloud computing services, disaster recovery planning, and network security protocols are essential components, with a growing emphasis on server virtualization and server rack density. Capacity planning and thermal management systems are crucial for maintaining uptime and reducing latency, while data center automation and building management systems streamline operations. Colocation facilities offer flexibility and cost savings, with bandwidth optimization and data center security ensuring data protection.

Key performance indicators include server virtualization, power usage effectiveness, and rack space utilization. Companies are investing in precision cooling systems, power distribution units, IT support services, and high-performance computing to enhance their data center design. Uninterruptible power supply and network bandwidth are essential for maintaining optimal data center cooling and ai-powered monitoring. Physical security systems and uptime monitoring are also prioritized to safeguard against potential threats and ensure business continuity.

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The IT infrastructure segment was valued at USD 18.69 billion in 2019 and showed a gradual increase during the forecast period.

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Market Dynamics

Our researchers analyzed the data with 2024 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

In the dynamic and evolving landscape of the market, energy efficiency best practices are gaining increasing importance as data center operators strive to minimize environmental impact and reduce operational costs. Cloud computing's influence on data center design is significant, driving the implementation of advanced cooling technologies to optimize power distribution and improve network performance in virtualized environments. Large-scale data center infrastructure management poses challenges, necessitating strategies for improving uptime and ensuring business continuity. AI is increasingly being leveraged for data center operations, from optimizing server rack density for improved efficiency to automating routine tasks and modernizing infrastructure. Data center security incident response planning is a critical concern, with advanced techniques for data center security becoming increasingly essential to mitigate risks and maintain compliance.

Effective capacity planning is another priority, as is reducing operational costs through sustainable practices and optimizing power usage. Adoption rates of advanced cooling technologies in China's data center market are notably higher than in some other regions, with more than 60% of new installations incorporating these solutions. This trend reflects the country's commitment to environmental sustainability and the growing recognition of the economic benefits of energy efficiency. In conclusion, the Chinese data center market is characterized by a strong focus on innovation, efficiency, and sustainability. Operators are continually exploring new strategies to improve uptime, optimize power distribution, and reduce operational costs, while also addressing the challenges of managing large-scale infrastructure and ensuring data security and business continuity.

What are the key market drivers leading to the rise in the adoption of Data Center in China Industry?

• The surge in demand for hyper-converged data centers serves as the primary market driver, given their efficiency and flexibility in managing IT infrastructure. 

• Converged infrastructure solutions, a data center management practice that integrates computing, networking, servers, storage, and virtualization tools into turnkey appliances, are gaining significant traction in China. Hyper-convergence, a type of converged infrastructure, further streamlines IT operations by combining technologies into a single, integrated system. Compared to standalone infrastructure solutions, the adoption of converged and hyper-converged infrastructure is more prevalent in China. This trend can be attributed to the cost-effectiveness of these solutions, making them an attractive option for organizations. The bundling of software and hardware components into a single system simplifies IT infrastructure management and enhances operational efficiency.
• Organizations in China are increasingly recognizing the benefits of these solutions and are investing in their implementation. Converged infrastructure solutions offer a comprehensive, data-driven approach to managing IT infrastructure, making them a valuable investment for businesses seeking to optimize their operations.

What are the market trends shaping the Data Center in China Industry?

• The use of server disaggregation is becoming a market trend, with the potential to significantly improve utilization rates. This approach disaggregates server resources, enabling more efficient use and greater flexibility.

• Data centers face escalating power demands due to the expanding use of cloud computing, intricate AI, machine learning, and IoT applications. With the inability to decrease server populations, data centers seek methods to amplify server utilization rates, thereby lessening energy consumption. One such approach is server disaggregation. This strategy enables the decoupling of compute and network resources, leading to improved server utilization and power savings.
• As more workloads are allocated to underutilized servers, fewer servers are needed to manage existing tasks, consequently reducing energy consumption. The continuous evolution of technology and the increasing complexity of workloads necessitate data centers to adopt innovative solutions, such as server disaggregation, to maintain efficiency and minimize environmental impact.

What challenges does the Data Center in China Industry face during its growth?

• The increasing priority on consolidating data centers poses a significant challenge to the industry's growth trajectory. This trend necessitates strategic mergers and acquisitions, as well as investments in advanced technologies, to optimize operations and enhance efficiency. 

• Infrastructure-as-a-service (IaaS) is a cloud computing concept that enables organizations to utilize virtualized computing resources over the Internet. The widespread adoption of IaaS has instigated a trend towards data center consolidation. This process involves decreasing the physical size of data center facilities or merging multiple data centers. Data center consolidation results in significant cost savings, leading many IT departments to adopt common cloud platforms instead of maintaining individual data centers.
• An essential component of data center operations, storage virtualization, plays a crucial role in managing information. It minimizes the requirement for additional storage infrastructure and enhances access to services. The continuous evolution of IaaS and data center consolidation underscores the importance of adaptability and flexibility in today's business landscape.

Exclusive Customer Landscape

The china data center market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the china data center market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

 Customer Landscape of Data Center in China Industry

Competitive Landscape & Market Insights

Companies are implementing various strategies, such as strategic alliances, china data center market forecast, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the industry.

Alibaba Group Holding Ltd. - The Alibaba Cloud data center is a leading provider of innovative and scalable infrastructure solutions, enabling businesses to optimize their digital transformation journey. With advanced technologies and robust security measures, this data center empowers enterprises to enhance agility, improve efficiency, and accelerate growth.

The industry research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• Alibaba Group Holding Ltd.
• AT and T Inc.
• Baidu Inc.
• Beijing Sinnet technology Co. Ltd.
• China Mobile Ltd.
• China Telecom Corp. Ltd.
• China Unicom Hong Kong Ltd.
• CICC Data Group Co. Ltd.
• Digital Realty Trust Inc.
• Eaton Corp.
• Equinix Inc.
• Fujitsu Ltd.
• GDS Holdings Ltd.
• Global Switch Ltd.
• Shanghai Dataport Co. Ltd.
• Telstra Corp. Ltd.
• Tencent Holdings Ltd.
• VNET Group Inc.
• Wangsu Science and Technology Co. Ltd.
• Zenlayer Inc.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key industry players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Recent Development and News in Data Center Market In China

• In January 2024, Alibaba Group, a leading Chinese multinational conglomerate, announced the expansion of its cloud computing business with the launch of three new data centers in Shanghai, Beijing, and Hangzhou. These data centers are expected to increase Alibaba's total data center capacity by 2 million square meters (21.5 million square feet) (Alibaba Group press release, 2024).
• In March 2024, Huawei, the Chinese tech giant, formed a strategic partnership with China Mobile to jointly develop and operate edge data centers across China. This collaboration aims to accelerate the deployment of 5G networks and support the growing demand for low-latency services (China Mobile press release, 2024).
• In May 2025, Tencent Holdings, the Chinese tech conglomerate, completed the acquisition of a majority stake in the Singapore-based data center provider, ST Telemedia Global Data Centers. This acquisition is expected to strengthen Tencent's international presence and expand its data center footprint beyond China (Tencent Holdings press release, 2025).
• In May 2025, the Chinese government issued a policy document, "The 14th Five-Year Plan for National Informatization," which emphasizes the development of data centers as a key priority. The plan includes the construction of over 1,000 new data centers and the upgrading of existing facilities to support the digital transformation of various industries (China National Development and Reform Commission press release, 2025).

Dive into Technavio’s robust research methodology, blending expert interviews, extensive data synthesis, and validated models for unparalleled China Data Center Market insights. See full methodology.

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Research Analyst Overview

• In the dynamic and evolving the market, energy efficiency metrics play a pivotal role in driving innovation and optimization. Structured cabling and IT infrastructure management are increasingly prioritized to enhance operational efficiency and reduce costs. Predictive maintenance and liquid cooling technology are gaining traction, with the latter offering significant energy savings and improved thermal management. Network infrastructure, cloud computing services, and disaster recovery planning are key areas of investment, as businesses seek to ensure uninterrupted operations and mitigate risks. Network security protocols, storage area networks, and virtual desktop infrastructure are essential components of robust IT strategies, while capacity planning and thermal management systems enable scalability and reliability.
• Data center automation and design are crucial for optimizing server rack density and integrating building management systems. Colocation facilities provide flexible solutions for businesses, while bandwidth optimization and power distribution units ensure efficient energy usage. IT support services, high-performance computing, and power usage effectiveness are essential for maintaining a competitive edge. Remote hands services, environmental monitoring, and rack space utilization are essential for maximizing operational efficiency. Latency reduction and uninterruptible power supply are critical for ensuring optimal performance and uptime. Data center cooling, AI-powered monitoring, server virtualization, and precision cooling systems are all integral components of modern data center operations.
• In summary, the market is characterized by continuous innovation and evolving trends. Energy efficiency, IT infrastructure optimization, and advanced technologies such as liquid cooling and AI-powered monitoring are driving growth and transformation. Businesses must stay informed of these trends to remain competitive and adapt to the ever-changing landscape.

What are the Key Data Covered in this China Data Center Market Research and Growth Report?

• What is the expected growth of the China Data Center Market between 2025 and 2029?

  • USD 274.39 billion, at a CAGR of 38.3%

• What segmentation does the market report cover?

  • The report segmented by Component (IT infrastructure, Power management, Mechanical construction, General construction, and Others), End-user (BFSI, Telecom and IT, Government, Energy and utilities, and Others), and Geography (APAC)

• Which regions are analyzed in the report?

  • China

• What are the key growth drivers and market challenges?

  • Rising demand for hyper-converged data centers, Growing focus on consolidating data centers

• Who are the major players in the Data Center Market in China?

  • Key Companies Alibaba Group Holding Ltd., AT and T Inc., Baidu Inc., Beijing Sinnet technology Co. Ltd., China Mobile Ltd., China Telecom Corp. Ltd., China Unicom Hong Kong Ltd., CICC Data Group Co. Ltd., Digital Realty Trust Inc., Eaton Corp., Equinix Inc., Fujitsu Ltd., GDS Holdings Ltd., Global Switch Ltd., Shanghai Dataport Co. Ltd., Telstra Corp. Ltd., Tencent Holdings Ltd., VNET Group Inc., Wangsu Science and Technology Co. Ltd., and Zenlayer Inc.

Market Research Insights

• The market continues to expand, with new installations and upgrades driving growth. According to industry estimates, the number of data centers in China reached over 1,500 in 2020, a 10% increase from the previous year. This growth is fueled by the increasing demand for cloud services, IT outsourcing, and AI-driven analytics. Sustainable data center designs, such as air cooling and energy consumption reduction, are becoming increasingly important. For instance, some data centers have achieved a power usage effectiveness (PUE) ratio as low as 1.2, significantly reducing energy consumption. In contrast, traditional data centers have an average PUE ratio of 2.0 or higher.
• This trend towards more efficient designs reflects the importance of operational efficiency improvements and response time in today's digital economy. Moreover, the market is witnessing a shift towards hybrid cloud solutions, with businesses adopting a mix of public, private, and edge computing deployments to optimize network performance and ensure business continuity planning. This requires advanced system design, server consolidation, and performance benchmarking, as well as robust physical security controls and cybersecurity threats mitigation measures. Despite these challenges, data center modernization and consolidation initiatives are ongoing, with companies seeking to optimize space, improve fault tolerance, and enhance network architecture through real-time monitoring tools, fiber optic cabling, and backup power systems.
• These efforts aim to ensure operational efficiency improvements and minimize downtime, while also reducing capital and operational expenses.

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