Construction of China's largest data center will start in 2014 in the Xinjiang Uygur autonomous region, media reports said on Wednesday.

Yu Yong, president of ZTE Energy Co, was quoted by Xinjiang Daily as saying that the facility will be located in Hutubi county. The first phase, a 20,000-square-meter machine room built to international standards, is designed for cloud computing, data storage and backup. It will be used mainly for basic data storage and as a disaster-recovery system for government.

The first phase is expected to be finished in 2015 with full completion in 2020.

Annual income is expected to reach 12.05 billion yuan ($1.98 billion).

“The center will improve information services, including data storage, transmission, control and processing for Xinjiang clients, along with a sharp rise in the speed of information flow,” said Hou Weigui, board chairman of ZTE Corp and ZTE Energy.

Currently, Xinjiang has three cloud computing centers for government businesses, TV and health services. Four large facilities, using investment of more than 1 billion yuan, are under construction.

Cloud computing is a term used to describe a variety of approaches involving a large number of computers connected through a real-time communication network. It relies on sharing of resources to achieve coherence and economies of scale.

Cloud resources are usually not only shared by multiple users but are dynamically reallocated based on demand.