A tech booth at a cloud computing expo in Hohhot. WANG HUI/ FOR CHINA DAILY

Hohhot is also an important intersection for the optical cable arteries of China's three telecommunication operators. It is also a pivot on Inner Mongolia's optical cable trunk lines.

Cloud computing has been a hot topic for a long time.

The world's major IT players, including Microsoft and Google, have focused development strategies on cloud platforms, seeing it as an important way to maintain their competitive edge.

Chinese companies started exploring the potential offered by cloud computing in 2008.

China's 12th Five-Year Plan (2011-15), released in March 2011 introduced a clear-cut policy to support the nation's IT and other emerging industries.

According to the Ministry of Science and Technology, China will build self-developed cloud-computing technology by the end of 2015.

Provinces and autonomous regions in the country started to release cloud-computing industry development plans following the mandate. "The objective of the city's cloud computing development is to build a national-level industrial hub and a disaster data recovery center that offers services to the whole nation," said Qin Yi, mayor of Hohhot. "With a stable geologic structure and competitive advantages in climate, educational and energy resources, Hohhot has geographical advantages to develop the cloud computing industry."

To reach that goal, the municipal government has unveiled a range of policy measures in financing, infrastructure, project development, innovation, tax, talent recruiting and many others. "A pivotal cloud computing industry base", as outlined in the plan, is under construction. It has attracted several companies including the three major telecom operators in the country, and renowned IT giants such as Alibaba, Baidu, Tencent and Inspur. The total investment from the companies is expected to reach 70 billion yuan ($11 billion). The actual investment now is some 5 billion yuan. The nation's three telecom operators－China Mobile, China Unicom and China Telecom－have set up cloud computing data centers with businesses serving the country. Projects from the three giants are worth 50 billion yuan.

The municipal government is also working on integrating cloud computing with the big data industry. The output of the two sectors is expected to reach 20 billion yuan by 2020, according to the government.

The government will also set up investment funds for the industry to fuel local companies and offer larger backup for local R&D.