China’s Guizhou province may not be very familiar to many people outside the country. In fact, if you haven’t traveled through this rural region as a tourist, you probably haven’t heard of it. That could soon change. China is now laying the foundation for a far-reaching restructuring of its economy in Guizhou.
Over the last decade, China has rapidly developed into a digital heavyweight. Three companies, all founded in the last twenty years, have largely been the drivers for this trend: Baidu, Alibaba and Tencent. Their growth is reminiscent of the development of three large American companies: Google, Facebook and Amazon. Baidu, which started out as a search engine, has recently made forays into autonomous driving.
Ali Baba began its life as an online merchant. The company now offers services in artificial intelligence and banking. Tencent ultimately turned the comprehensive messenger service WeChat into a major player and made a name for itself in computer games and in financial technology. The estimated market value of the “Big Three” represents almost one-tenth of China’s gross domestic product. They are the main reason that China accounts for more than 40 percent of world’s online commerce.
The Digital Heart
When China’s highest authorities look ahead at their country’s future development, they see digitalization and its key sub-areas playing a central role. China wants to be the global leader in artificial intelligence by 2030. And last year, Chinese President Xi Jinping stressed the enormous importance of a pioneering Big Data role for China. The key to the restructuring of China’s overall economy is believed to be in collecting, storing and analyzing huge volumes of data. And the keyhole, so to speak, is taking shape in Guizhou province, nearly 2,000 kilometers southwest of Beijing. The province is considered one of the country’s least developed and poorest regions. That may not be the case much longer as the provincial and central governments diligently develop the region and make huge investments there. In 2015, Guizhou was named the country’s special zone for Big Data. A range of infrastructure programs have accompanied the efforts to make it China’s digital core.
Global Companies Building Own Computing Centers
On the high elevations of Guizhou province, huge computing centers are being built in tunnels that are bored deep into the hilly landscape. Some of the world’s largest companies – ranging from Huawei to Tencent and Alibaba, all the way to Microsoft and Apple – are constructing gigantic server farms there. Huawei alone will allegedly operate 600,000 servers in the province. Apple has reportedly invested $1 billion in its operations. The American giant and the other companies own the crucial platforms whose portals have been positioned at the interface between manufacturers and consumers. The information that they collect is valuable – it provides insight into consumers’ preferred patterns of behavior and purchase decisions. But since the quantity of data is becoming more and more unmanageable, the companies and the Chinese government want to be able to evaluate the information quickly and productively with the help of Big Data processes. In China, the world’s second largest economy, the heart of these new developments will beat in Guizhou.
Read more about Guizhou’s special Big Data zone in the next edition of ESSENTIAL, the Freudenberg Sealing Technologies customer magazine. The edition is entirely devoted to digitalization and will be published in May.