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The firms several data hubs are a microcosm of the countrys effort to boost digital economy through reallocation of data and computing power.

Chinese cloud computing company UCloud (688158) (Chinese: ) announced recently that it will put its computing center in suburban Shanghai into operation in June this year, as the firm seeks to benefit from the countrys gigantic data transmission project.

The Shanghai-based provider of cloud computing services told media that the center, one of the companys two self-built data hubs, is located in Shanghais Qingpu District. The other is in Ulanqab of northern Chinas Inner Mongolia autonomous region and was already operational in July 2021, after construction on the first phase of the project drew to a close.

The two centers aim to make full use of Chinas new strategy of Eastern data, Western Computing, whereby data gathered in the countrys eastern regions will be sent to less prosperous but resource-rich western China for storage and processing.

A remarkable number of clients who transferred computing power servers to western China normally cut their cost by more than 30%, said Ji Xinhua, the CEO of UCloud.

The two new centers are among the eight computing hubs UCloud has deployed nationwide as part of the data transmission project.

The one in Qingpu, covering an area of 27,987 square meters, will accommodate 3,000 computer cabinets in its first phase of the project. The other hub in Ulanqab, a city on the steppe of Inner Mongolia, spans 140,000 square meters, hosting a total of 6,000 cabinets.

UCloud plans a division of labor between the two centers scattered across a distance of about 1,600 kilometers. The Qingpu hub will be used to process orders for corporate clients that require fast responses, such as those from industrial Internet, securities, video call and telemedicine.

As a comparison, the center in Ulanqab, with its cheap electricity and low temperature which helps to cool the equipment, is more suitable for cost-minded users who place an emphasis on data computing and data storage.

To strike a balance between cost and flexibility and expand its global layout, UCloud said it will combine self-constructed centers with the traditional mode of renting Internet Data Center, which is more expensive but faster to deploy.

However, market watchers argue that the company still has much catch-up to do before it can grow into one of the front-runners in cloud computing worldwide. A shortage of talent in western China and limited data transmission capacity may restrain its development, media reported.

Alibaba Cloud and Huawei Cloud also have started constructing computing centers in western China. Stocks of companies related to the east-to-west data relay project have rallied on Chinas A-share market, such as Shanghai Yanhua Smartech (002178) (Chinese: ), a supplier of AI architecture and digital communities, and Shanghai AtHub (603881) (Chinese: ), a data center service provider.

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Cloud Company UCloud to Tap Computing Hub in Shanghai in June to Process Data - EqualOcean