Transformation of the Hangzhou Iron & Steel Banshan Base, Hangzhou

1. Project Overview

The Hangzhou Iron & Steel (Hangsteel) Banshan Base lies in the core of the Grand Canal New City in Gongshu District, Hangzhou, and was once one of Zhejiang Province's most important steel bases. In 2016, to implement supply-side structural reform and environmental requirements, all steel production lines were shut down. In 2020 Hangzhou formally launched the transformation of the base. Under the overall plan, nearly two thirds of the base's land was handed over to the city for urban development, while the group retained the remaining 1,743 mu for its own new industries.

This redevelopment covers 547 mu of the land retained by Hangzhou Iron & Steel Group Co., Ltd. ("Hangsteel Group"), or 31.4% of its own land. It mainly comprises two data and computing centres — Zhejiang Cloud and Hangsteel Cloud — and the group headquarters' IT application innovation base ("IT Innovation Centre"). It is the flagship project for Hangsteel's Banshan Digital Economy Town and for the group's shift "from making steel to processing data".

2. Redevelopment Entity and Model

(1) Why the land was inefficient

First, old buildings and low development intensity. The original factories were mostly built in the 20th century and were simple and dilapidated. The average floor area ratio within the project area was below 0.6, meeting Hangzhou's criteria for inefficient industrial land, and the buildings could not meet modern industries' basic requirements for safety, function and image.

Second, industrial space held for a long time without producing value. After the steel lines closed, ancillary buildings in the area — such as the former TV station and the military affairs department warehouse — did not meet modern office standards; special production spaces such as the small rolling mill were difficult to adapt to new manufacturing because of their process layout; and usable space such as the medium rolling mill could only be rented cheaply to logistics and warehousing companies, generating little income and harming the surroundings.

Third, complex land tenure out of step with planning. The land included multiple administratively allocated and leased parcels that were seriously out of line with current planning and land policy, leaving the land in a state of "institutional freeze".

(2) Redevelopment entity and model

Hangsteel Group is the redevelopment entity. In 2023, taking the opportunity of the national pilot programme for redeveloping inefficient land, the group adopted a model of "SOE-led, area-wide coordination, computing-power-led" redevelopment, exploring a new path for large state-owned enterprises to redevelop their existing land. This project is the core launch area of Hangsteel's redevelopment. As the sole redevelopment entity, the group coordinates the contiguous upgrading of its retained land and has brought in leading digital economy companies and projects such as Huaguanghong computing equipment manufacturing, building the Hangsteel Banshan Digital Economy (Computing) Town.

3. Results of the Redevelopment

(1) A jump in industrial capacity

Three industrial clusters centred on the project — cloud computing, cloud services and cloud-based smart manufacturing — reinforce the region's upstream "hard infrastructure" for artificial intelligence and cloud computing and form a strong engine for a new "computing equipment R&D and manufacturing chain". This has moved the Banshan base from steelmaking to data, providing computing support for a national extra-large data (intelligent computing) centre, a computing equipment manufacturing base and a provincial computing hub for 10,000-GPU clusters.

(2) Multiplied spatial efficiency

The project revitalized 547 mu of inefficient industrial land and added more than 230,000 square metres of industrial space. In the IT Innovation Centre, multi-storey industrial buildings nearly doubled the floor area ratio and added nearly 62,000 square metres of floor space, expanding industrial space vertically and using land intensively. Fixed-asset investment intensity is no less than CNY 10 million per mu — far above the provincial standard of CNY 3.7745 million per mu, the municipal standard of CNY 5.4 million per mu and the CNY 8 million per mu required in the surrounding area.

(3) Clear economic returns

Total investment exceeds CNY 10 billion. Output per mu has risen to CNY 25 million and tax revenue per mu to CNY 1.2 million, far above typical manufacturing. More than 130 companies have moved into the redevelopment area so far, bringing in over 10,000 talent arrivals, and the effects of supply-chain extension and clustering are beginning to show. In 2025 the park's above-designated-size companies paid CNY 96.257 million in taxes, up 7.21% year on year. When fully operational in 2032, companies in the park are expected to generate annual output of more than CNY 11 billion and annual taxes of more than CNY 150 million.

4. Key Practices

(1) Seizing the moment and entering the computing sector

Facing the rise of the digital economy and surging demand for computing power, the base took advantage of the national "East Data, West Computing" programme and Zhejiang's "No. 1 Development Project" for digital economy innovation, systematically locating the computing industry on inefficient industrial land.

First, planning guidance to enter the digital economy. The Territorial Spatial Plan for the Greater Northern Hangzhou Area (2023–2035) gave the area around the Banshan base the task of "focusing on new quality productive forces, revitalizing inefficient industrial land and reserving space for emerging industries". Accordingly, the base set out a "one town, two parks, three zones" layout for the digital economy town, built around three clusters — cloud computing, cloud services and cloud-based smart manufacturing — forming an integrated digital ecosystem of computing equipment manufacturing, computing supply and AI applications.

Second, the "two clouds" as an engine for computing infrastructure. Within this layout, the two computing foundations, Zhejiang Cloud and Hangsteel Cloud, were placed first in the cloud computing zone, and a joint big-data computing and application platform has been largely completed. Zhejiang Cloud was the first project under Zhejiang's three-year action plan for new infrastructure to start construction. With total investment of CNY 15.8 billion, it has ten data-centre buildings housing about 10,800 server racks, able to run 200,000 servers.

(2) Diverse development methods to upgrade existing space

First, a redevelopment scheme to coordinate implementation. Hangsteel's retained land included parcels allocated or leased in different periods, with problems such as parcel boundaries not matching planning red lines. As the implementing entity, Hangsteel Group prepared a redevelopment scheme that reviewed the current state, ownership and planning compliance of every parcel. Moving beyond a single-parcel mindset, it integrated parcels across boundaries while setting back for planned roads and green space, restructuring fragmented property rights into new, regularly shaped parcels. On the IT Innovation Centre site, five closed, unproductive plots were consolidated into one regular industrial plot, and nearly 20 mu was contributed for urban roads and green space.

Second, tailored approaches. For existing buildings, those with historic value or practical function — such as the Hangsteel dispatch building, the new wing of the Dongshan Hotel and the Hangsteel exhibition centre — were retained, while old buildings were demolished and rebuilt with high-quality modern production and support space. For property rights, historically allocated land could not be built on directly under the new plan. The solution was a land supply model of "re-dividing parcels and transferring them by agreement back to the original rights holder under the new planning conditions". This opened a channel for allocating land, broke the institutional freeze and protected the original company's right to redevelop its own industrial land. For redevelopment strategy, the pilot policies on inefficient land and Hangzhou's industrial and commercial reform policies were fully used to support Hangsteel in merging parcels for redevelopment, developing adjacent land together and providing supporting facilities in a coordinated way.

Third, multi-storey industrial buildings for the digital economy. The IT Innovation Centre raised development intensity in line with its computing industry positioning, offering standard factory space in several formats including industrial towers and stand-alone factory buildings. The floor area ratio rose from 0.7 to 1.5, adding about 92,000 square metres of industrial space. Under the multi-storey industrial building policy, the cap on land for administrative offices and living services was raised from 7% to 15% of the site, and the cap on their floor area from 15% to 30%. Shared facilities including offices, testing, laboratories, apartments and canteens were provided, integrating production, living and ecological space.

(3) Proactive local services enabling SOE transformation

Municipal and district governments shifted from being "land managers" to "enablers of transformation".

First, planning management adapted to revitalizing existing land. The revision of the detailed plan for the Banshan planning unit was carried out in parallel with the redevelopment scheme, incorporated into Hangzhou's "one map" system for territorial spatial planning implementation and supervision, and approved in 2024. The detailed plan focused on current tenure, the implementing entity's needs and the requirements of new productive forces, re-dividing planning plots to suit incoming industries.

Second, precise, end-to-end services from district departments. The Gongshu District natural resources and planning department drew up a procedure for self-redevelopment of inefficient industrial land within Hangsteel's retained land, guiding the group through application, preliminary review, joint approval and transfer by agreement, creating a replicable service model for transforming SOEs' existing land.

Third, better regional infrastructure. The city and district integrated the Banshan redevelopment into the overall Grand Canal cultural belt, connecting a looped water network of the Grand Canal, Hangsteel River, Power Plant River and Hangsteel Lake. The 2,676 mu handed to the city government followed the principles of "remediate first, develop later; public benefit first, commercial operation later", forgoing short-term land sale revenue in order to complete the Grand Canal Hangsteel Park, surrounding roads and other public facilities first — strong support for cultivating new productive forces and attracting innovation talent.

5. Policy Basis

(1) The requirements to "encourage area-wide coordination" and "diverse development models for industrial land" in the Notice of the Ministry of Natural Resources on Launching Pilot Work on the Redevelopment of Inefficiently Used Land (Ziran Zifa [2023] No. 171) and the Hangzhou Implementation Plan for the Pilot Redevelopment of Inefficiently Used Land provided the higher-level basis and policy support for the base's transformation.

(2) The Implementation Opinions of the General Office of the Hangzhou Municipal Government on Promoting Multi-storey Industrial Buildings for High-quality Manufacturing Development (Trial) set out project conditions, approval services and operational management requirements for multi-storey industrial buildings, providing the operating basis for building the IT Innovation Centre.

(3) The Gongshu District Detailed Rules for the Pilot Redevelopment of Inefficiently Used Land (Trial) set out the specific path and procedures for implementing the project.