China Data Center Cooling Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

China Data Center Cooling Market Trends and Insights

Surging hyperscale and AI-driven rack densities

Modern AI cabinets consume 20-130 kW versus 5-10 kW for legacy servers, rendering air cooling insufficient and propelling mass adoption of liquid technologies. Huawei’s closed liquid-cooled cabinet cuts cooling power by 96% and lowers facility PUE to 1.1, proving viability at the hyperscale level.^{[1]Huawei Technologies, “Next-Generation Liquid-Cooled Cabinet Solution,” huawei.com} National flagship AI compute clusters in Gui’an, Ulanqab, and Wuhu now specify liquid solutions at the build-out stage, underscoring a structural shift that places thermal design on par with chip performance in data-center planning.

Government-mandated PUE caps for new builds

Beijing’s 14th Five-Year plan requires all new data centers to operate below 1.5 PUE by 2025, while Shanghai tightens the threshold to 1.3. The 2023 Green Data Center standard expands compliance to water-consumption ratios and renewable-energy sourcing, cementing liquid cooling as the only practical route to meet efficiency targets at scale.^{[2] Ministry of Industry and Information Technology, “Guidelines for Data-Center Energy Efficiency,” gov.cn}

Rapid colocation expansion

GDS Holdings booked a 17.7% YoY revenue increase to RMB 2.97 billion (USD 416 million) in Q3 2024, citing accelerated tenant migrations and multi-tenant AI clusters. Colocation providers leverage scale to amortise high-end liquid systems while offering differentiated cooling SLAs that attract hyperscaler tenants, reinforcing a virtuous cycle of density and efficiency gains.

Maturing liquid-cooling supply chain and local OEM scale-up

Chemours’ 2025 pact with Navin Fluorine localises production of Opteon two-phase fluids, mitigating tariff risk and lowering cost barriers for domestic adopters.^{[3]Chemours, “Chemours and Navin Fluorine to Produce Opteon™ Immersion Fluid in China,” chemours.com} Parallel investments by firms such as Envicool and Yimikang are shortening lead times for pumps, manifolds, and heat exchangers, giving Chinese operators strategic autonomy in critical cooling components.

High electricity tariffs eroding TCO advantages

Data center power draw is expected to climb from 200 TWh in 2025 toward 400-600 TWh by 2030, with tariffs in Jiangsu and Zhejiang raising operating costs enough to negate savings from legacy equipment depreciation. The Eastern Data and Western Compute initiative counterbalances the burden by relocating load to renewable-rich provinces but requires operators to reconcile latency and fibre-backhaul constraints. 

Growing water-stress curbing evaporative-cooling permits

Annual water demand from Chinese data centers could exceed 3 billion m³ by 2030, straining already dry river basins that host three-quarters of national rack capacity. Municipal authorities are therefore refusing new evaporative-tower permits and encouraging closed-loop or seawater solutions; China’s Hainan offshore data center demonstrates the shift, using natural seawater to cool high-density AI racks. 

Segment Analysis

By Data Center Type: Hyperscalers accelerate liquid upgrades

Hyperscalers accounted for 46.5% of 2024 revenue, and their contribution to the China data center cooling market size is forecast to expand at 17.9% CAGR through 2030. These firms build AI clusters that exceed 100 kW per rack, making liquid technology non-negotiable for thermal headroom and PUE compliance. Their scale also drives down per-rack cooling cost, creating a benchmark that enterprise and edge operators now emulate. Edge sites, however, favour compact rear-door heat exchangers due to space and maintenance limits. The hyperscaler wave ensures that liquid infrastructure will dominate new capacity additions, even though air systems retain a retrofit niche.

Colocation operators mirror this trajectory by bundling dedicated liquid zones as premium services, converting density into both margin and differentiated customer experience. Enterprise facilities lag on full immersion adoption but are piloting direct-to-chip loops to stretch existing chiller plants. Combined, these moves keep the China data center cooling market on a high-growth path as every operator segment advances toward AI-ready thermal architectures.

By Tier Type: Tier 4 construction gains share despite Tier 3 dominance

Tier 3 sites captured 67.1% of spending in 2024 thanks to their mature design frameworks and competitive balance of uptime vs. capex. Yet Tier 4 builds are growing at 19.2% CAGR because AI training workloads cannot afford even minutes of unplanned downtime. The China data center cooling market size for Tier 4 facilities will therefore rise swiftly as investors prioritise fault-tolerant, concurrently maintainable liquid systems that keep racks within 30 °C even during maintenance.

Tier 1 and Tier 2 footprints are steadily cannibalised as their power and cooling envelopes top out below 15 kW per rack. Meanwhile, Tier 3 specifications are being retrofitted with dual-loop liquid infrastructure so operators can satisfy new customer density requirements without a green-field Tier 4 budget. This tier evolution reinforces liquid technology as the baseline for any AI-centric build in China’s data center cooling market.

By Cooling Technology: Liquid systems close the gap on air incumbents

Air technologies still held 63.7% revenue share in 2024, but liquid methods are slated to capture the lion’s share of new capacity given their 18.3% CAGR forecast. Direct-to-chip loops remove up to 80% of server heat at the source, while immersion baths are driving PUE to near-1.0 levels in purpose-built AI pods. Rear-door heat exchangers, which require minimal floor reconfiguration, bridge legacy rooms into the liquid era and thus soften migration hurdles.

Within the remaining air segment, indirect evaporative and two-stage economisers maximise free-cooling hours in north-western provinces where annual mean temperatures stay below 10 °C. However, looming water-use limits underpin an inexorable shift toward sealed liquid circuits nationwide. Consequently, liquid adoption has become the central storyline shaping competitive dynamics and vendor R&D in the China data center cooling market.

By Component: Services boom alongside equipment leadership

Equipment purchases represented 82.3% of spend in 2024, reflecting the capital-intensive nature of chillers, CDUs, manifolds, and heat exchangers. As operators mature, however, services are climbing at an 18.7% CAGR, transforming the revenue mix. Consulting teams now blueprint fluid chemistry, fail-over logic, and future density headroom, while field engineers manage the precise commissioning that liquid networks demand.

Predictive maintenance contracts that utilise continuous coolant-quality monitoring and leak detection are becoming standard service upsells. Training programmes covering dielectric-fluid handling and emergency response have become mandatory for operating permits in Tier 1 cities. Together, these service layers lock in recurring revenue streams for vendors and reinforce customer reliance on specialised expertise, anchoring long-term growth within the China data center cooling market.

Geography Analysis

China’s cooling demand is undergoing a major east-to-west realignment. Ningxia, Gansu, and Inner Mongolia clusters leverage desert solar and sub-zero winters to achieve year-round free cooling, helping regional facilities post PUE readings near 1.2 without resorting to water-intensive towers. Inner Mongolia alone plans to triple rack counts to 720,000 by 2025, carving out a sizeable share of future China data center cooling market additions.

Nonetheless, Beijing, Shanghai, and Guangzhou still host the bulk of hyperscale footprint because of low-latency requirements. These cities suffer summer wet-bulb temperatures above 28 °C, forcing operators to adopt closed-loop liquid systems and invest in recycled water plants to respect municipal withdrawal caps. Shanghai’s sub-1.3 PUE mandate led multiple providers to retrofit direct-to-chip loops in 2024, pre-figuring a broader coastal transition that will amplify demand for advanced fluid technologies Tencent Cloud.

Coastal innovation continues with underwater data centers off Hainan, where seawater-based conduction cools AI racks processing 7,000 queries per second. Simultaneously, Tibet’s 3,600-metre-altitude facility in Lhasa exploits low ambient air to host disaster-recovery workloads for national banks. These geographic experiments underline the diversity of operating environments that vendors must address to win in the China data center cooling market.