Summary of Key Points
Ulanqab has become a hot spot for the domestic computing power industry in the past two years: By the end of 2024, 36 computing power center projects had been signed, and this number surged to 89 by mid-2026, with a computing capacity of 16.5 PFLOPS (trillions of calculations per second), placing it in the top tier nationwide (on par with Qingyang in Gansu). The reason major companies have flocked here is due to three key advantages: affordable green energy, low-latency networks, and a cool climate, which significantly reduce operating costs. However, rapid expansion also faces challenges such as a shortage of land permits, resulting in some projects being delayed or unable to proceed. Ulanqab is transitioning from being known as the “Potato Capital” and a “Ferrous Alloy Base” to a “Computing Power Capital,” but the computing power industry is still in its investment phase and has not yet generated significant economic value or tax revenue.
Detailed Analysis
1. Explosive Growth of Computing Power Projects
The number of computing power center projects in Ulanqab has increased nearly 2.5 times in two years, with 89 projects mainly concentrated in the Bayin and Yiwutang areas of the Chahar High-Tech Zone, as well as some in Jining District and Qianqi.
- Multiple Locations for Major Companies: Leading firms such as Huawei, Alibaba, Kuaishou, and Apple have established operations here. For example, Huawei has completed phases one and two in Yiwutang and is working on phase three in Bayin; Alibaba has facilities in Yiwutang, the Jining District logistics park, and Qianqi to diversify its data center locations.
- Varying Construction Progress: Most projects in the Yiwutang area are operational (e.g., Huawei’s phase one and Apple’s data centers), while the Bayin area is mostly under construction (with some parts of Zhongjin Data’s phase one completed and phase two underway; companies like Zoomlion and Century Internet are still working on their projects).
- National Leadership in Capacity: As of mid-2026, Ulanqab’s computing power capacity accounted for 8.7% of the national total, with over 90% being intelligent computing power, surpassing Hohhot and ranking it alongside Qingyang. The goal is to reach 200,000 PFLOPS by the end of 2026.
2. The Secrets Behind Major Companies’ Presence: Three Cost-Effective Advantages
Computing power centers are highly concerned with cost and stability, and Ulanqab meets these criteria perfectly:
- Incredible Electricity Prices: Electricity costs account for 60%-70% of operating expenses. The electricity price in the Mengxi Power Grid of Ulanqab is around 0.32 yuan per kilowatt-hour, and with direct access to green energy (wind and solar power), the household price is about 0.358 yuan per kilowatt-hour, which is 30%-40% lower than in eastern coastal areas. For example, a 10,000-kernel intelligent computing center that consumes 7,000 kWh of electricity per hour (equivalent to the daily usage of 300 households) can save hundreds of millions of yuan annually on electricity costs.
- Close Proximity to Beijing with Low Latency: The network latency between Ulanqab and Beijing is only 4.2 milliseconds (2.1 milliseconds in one direction), which is ideal for businesses in the Beijing-Tianjin-Hebei region for services like cloud computing and AI training.
- Cool Climate for Energy Efficiency: With an average annual temperature of 4.3°C and summer temperatures around 18.8°C, natural cooling can be used for 10 months a year, saving 30% on energy compared to air conditioning. A center with 10,000 cabinets could save 200-300 million kWh of electricity annually, resulting in additional cost savings.
- Geological Stability: Ulanqab has virtually no earthquakes, and its underground granite makes data centers safe and reliable.
3. Challenges in Growth: Land Shortages Hinder Project Implementation
The rapid growth of computing power projects has led to a shortage of land:
- Easy Signing, Difficult Implementation: Many projects have been signed, but due to limited land permits, they are waiting in line for allocation. For example, the Bayin area is already crowded with construction sites, and companies like Douyin and Wanguo Data are waiting for land. The Wanrun Computing Power Base in Shengjiaying Village, Jining District, is still at the preliminary stage, with only sheep grazing on the land and power workers assembling steel towers.
- Official Acknowledgment of Constraints: Officials from the Chahar High-Tech Zone Management Committee have acknowledged that land permits are a major obstacle to expansion. Despite this, Ulanqab remains one of the fastest-growing cities for computing power in the country.
4. The Road to Transformation: From “Potato Capital” to “Computing Power Capital”
Ulanqab previously had two reputations: “China’s Potato Capital” (with the largest planting area among prefecture-level cities) and a “Green Ferrous Alloy Base” (expected to generate over 100 billion yuan in revenue by 2025). Computing power is now its third identity, but the transformation is just beginning:
- Still in the Investment Phase: In 2024, the computing power industry generated only a few hundred million yuan in tax revenue. In the first seven months of 2026, data center electricity consumption accounted for 7.3% of total energy usage, compared to 54.4% for the ferrous alloy industry. Local officials say the industry is still in its investment phase and is not yet profitable; significant economic benefits will only come once the ongoing projects are completed.
- Future Plans for a “Token Capital: The government has plans to upgrade Ulanqab from a “Grassland Cloud Valley” to a “Token Capital,” focusing on computing power services, token trading (e.g., AI model metadata transactions), and intelligent applications. However, the upstream and downstream industries (such as high-end manufacturing and computing power applications) are still in their initial stages.
- The Key to Transformation: To convert computing power capacity into local revenue, it is necessary to extend the industrial chain by attracting server manufacturers, AI application companies, or engaging in computing power trading. Otherwise, most of the benefits from data services will go to headquarters, leaving Ulanqab with limited local income from land sales, property taxes, and employee salaries.
Ulanqab’s story illustrates how western cities can seize opportunities under the “East Data, West Computing” initiative by leveraging their resource advantages. However, to truly transform, they must address land constraints and deepen and expand their industrial chains. The journey of replacing traditional industries with computing power is just beginning.