China's Shaoguan Invests $17 Billion in AI-Driven Data Centers Amid Economic Shifts

China's technology companies are investing billions in data centres in Shaoguan, a mountainous region of Guangdong province. Alibaba, Tencent and Huawei are developing computing infrastructure using the region's ample land, cheap electricity and cooler climate. Shaoguan benefits from Beijing's multitrillion-yuan push to build inland computing infrastructure serving more populous coastal cities and supporting China's ambition to lead in AI. Beijing views the sector as a priority that could generate substantial growth and technological innovation.

Shaoguan's government has announced plans for 23 data centre complexes with total investment of Rmb111.6 billion ($17 billion). The investment equals 65% of the city's annual economic output last year, and officials hope the projects will significantly benefit Shaoguan. Data centre energy usage increased fivefold in the first half of this year, with construction completed on several projects. Local economic growth reached 5%, exceeding the provincial and national averages. Shaoguan's top official, Chen Shaorong, told a provincial political gathering earlier this year that Shaoguan was determined to provide a solid computing foundation for Guangdong. Cai Dayin, Shaoguan-based vice-president of software company Denovo, said the government had directed practically all government resources toward the computing cluster project. Cai said the project had substantially boosted the local economy.

Local governments from Guangdong to Inner Mongolia see data centres as an opportunity to attract investment, generate revenue from low-productivity land and stimulate growth. China's property-sector collapse has increased that opportunity's appeal because land sales previously generated about one-third of local government revenues. Shaoguan's mountainous terrain and relatively remote location excluded the region from the manufacturing and export boom in the Pearl River delta. Shaoguan's economy, dependent on tourism, farming and traditional manufacturing, has stalled. Annual disposable incomes averaged around Rmb36,000 ($5,300) in 2025. Rural disposable incomes were less than Rmb26,000 ($3,900).

Data centre construction in the US has often prompted protests over potential harm to energy costs, water usage and house prices. However, Shaoguan residents appear more concerned about whether the developments will provide tangible benefits after construction ends, despite construction noise and dust. A shopkeeper in her fifties near a China Unicom data centre said economic conditions had improved somewhat but pollution was very bad. Construction projects and workers have occupied parts of some villages since last year, with farmhouses advertising rooms and housing temporary wooden bunk beds. A business owner opened a store serving workers building a Tencent data centre on former grassland. The business owner said numerous buildings had appeared within one year in an area that had previously been empty. The business owner said monthly earnings of 4,000 yuan barely covered rent and utilities.

Denovo opened a local office late last year in a state-owned commercial building where several floors remained unfinished. Cai said most higher-skilled Denovo staff came from larger cities. Cai said local job creation was limited to supporting industries such as construction and material suppliers. Cai said the impact on the population was smaller than in more labour-intensive industries, although the GDP transformation was significant. Cai said Cai and colleagues spent many weekends in Shenzhen or Guangzhou. A shopkeeper said jobs in one data centre were scarce and poorly paid. The shopkeeper said a friend who worked there as a cleaner received around Rmb2,000 ($300) per month.

Some villagers have lost land to construction, and some villagers say compensation has not yet arrived. A former farmer in his sixties said the farmer no longer had land to grow vegetables. The former farmer said old age and a lack of income left the farmer dependent on the farmer's sons. The Shaoguan government did not respond to multiple requests for comment. Wang, a village-level party official near a data centre who provided only a surname, said land compensation was only the first step toward improving livelihoods. Wang said residents could also benefit from renting accommodation to workers or obtaining jobs in data centres. However, the store owner said the store owner planned to leave after construction ended. The store owner expressed deep regret about opening the business, citing dust and a lack of places to go or eat.