Chinese city at night


Published: November 2013
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More than 30 local governments in China have released high-profile cloud computing plans and put forward preferential land, tax, and other financial support policies. In some cases it has to be questionable whether these projects will ever be realised.

The plan for Chongqing however, worked out over the past three years, stands out. Not only because it has already devised and implemented a cloud datacenter strategy, but it has moved swiftly forward with plans that could present China with a radically different business model for the first time.

The city of Chongqing is now poised to take advantage of a window of opportunity in the coming 2-3 years to realize its ambitions of a city-wide economic transformation, revive its earlier idea of an offshore model and in the next 5-7 years to attain the level of “an Amsterdam” for the movement of digital goods and services in and around China and Asia.

To achieve this end, and what makes this city development different, is that Chongqing has been awarded the trial status of a cloud SAR is unique, and the first ever in China. This offers incentives for overseas investors and to an extent allays concerns over the legality of licenses and data protection. Ultimately the success of the trial depends upon the completion of a unique direct circuit connection to an international telecom gateway, the outcome of which should be known by the end of 2013.

This new report evaluates the extensive range of advantages, not least due to its status as a municipality, one of only 4 cities in this category. This means that Chongqing is accorded a very high priority by the central government over other localities and is able to secure more policy support and financial subsidies than other locations.

The report describes how the city offers business benefits for overseas investors across the issues common to all datacentre projects even though it is managed within an excessively bureaucratic context. Chongqing wants investors to experience a fast-track process through the minefields of licensing, land, construction, power supply and bandwidth issues.

The dedicated space selected for datacentre development is Liangjiang, located in the Shuitu Tech Park where construction has already taken place. 9 companies are already active in either building datacentres or in decision making and a number of further companies are currently assessing participation.

Pacnet has already built the first phase of its facility which has a design capacity of 40k servers. Regarded as a very key project, it is forecast that the new Tier III datacenter infrastructure will attract even more MNCs to relocate to the city.

Finally the report also looks at the challenges for overseas investors of which the license and data privacy remain an issue – but not for all enterprise customers.

Undoubtedly Chongqing represents a completely new way in the business model for datacenter operations in China and although not for the faint hearted, and still not easy, the commercial opportunities that could unfold from the Cloud SAR offer significant potential in the world’s largest datacenter market.