Guizhou: China's outstanding example of a tech miracle

April 12, 2019 11:53
Guizhou's climate and geographical features offer an ideal environment for data center operations. Photo: Xinhua

Previously, we talked about how Rwanda was able to rise from poverty by embracing technology. Such a dramatic shift also seems to be happening in southwestern China's Guizhou province.

As one of China’s poorest regions where the level of education is also the lowest, Guizhou has benefited hugely from the big data industry and e-commerce enterprises since 2014.

Its GDP expanded 9.1 percent last year, making it the country's fastest-growing province.

Guizhou's phenomenal transformation started when the provincial government set up the Big Data Enterprise Development Steering Group in 2014.

In the following year, President Xi Jinping visited Guizhou and endorsed its strategy of leveraging on its unique conditions to pursue a different growth path from those followed in the eastern and western regions.

Guizhou’s success in becoming China’s pilot region in the big data industry stems mainly from its geographical advantage.

The province ranks sixth among the most abundant in water resources, and as a result, its electricity costs are among the lowest in the country. This makes Guizhou attractive to large energy consumers such as big data centers.

In order to nurture the big data industry, a region must offer sites with good ventilation, which is important to save on electricity.

Guiyang, the provincial capital, has an average temperature of 14-16°C and a high proportion of wetlands and forests. As such, it is not surprising that the city has been named the second best summer destination in China.

Guiyang itself is a newly planned district which caters specifically to the lifestyle of the new generation. Along with the rise of big data centers, the city has attracted many young people to live and work there.

Given its climate, altitude, low energy costs and flexible town planning, Guiyang has been called “a natural data center” by industry professionals.

To better support the industry, the provincial government has endeavored to forge partnerships with technology giants such as Alibaba. In 2014, it unveiled an initiative to jointly promote cloud technology in the province with Alibaba.

In 2016, Alibaba's Taobao University set up training programmes for e-commerce entrepreneurs in Guizhou. Also, Leishan County in the eastern part of the province has become one of Alibaba’s top ten models of how farmers can lift themselves out of poverty through e-commerce.

Guizhou's collaboration with Alibaba has also benefited areas outside information technology.

For example, the guitar-making business of Zheng Chuan-jiu, dubbed China’s "King of Guitar", took off right after Jack Ma complimented his business at the Guiyang Big Data Expo.

In fact, investments from top guns like Ma have reinforced the location’s appeal to the new generation.

This is not unlike the way young Africans have become keen on going to Rwanda where IT companies from all over the world have established a presence.

The success of Guizhou, similar to that of Rwanda, stems from the top-down planning of an authoritarian government. In fact, poverty in the region had made it easier for authorities to introduce directional change.

The condition for success in the new economy is markedly different from that for traditional industries, as the examples of Rwanda and Guizhou show.

This article appeared in the Hong Kong Economic Journal on April 10

Translation by Jennifer Wong

[Chinese version 中文版]

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Associate professor and director of Global Studies Programme, Faculty of Social Science, at the Chinese University of Hong Kong; Lead Writer (Global) at the Hong Kong Economic Journal