China is building dozens, maybe hundreds of large data centers and vast “cloud cities” — industrial zones that aim to provide the foundations to support as many as 20 data centers — to support the needs of its fast-growing online population, estimated now at close to 500 million.

The data centers will help to meet escalating demand from telecom providers, and for services such as e-commerce, online banking and e-government, and will also provide computing infrastructure for overseas firms looking to expand in China.

The boom is providing opportunities for outside firms such as Hewlett-Packard and IBM. “We have more people in China focused on data center development and strategy than, I believe, in any country in the world,” said Rick Einhorn, worldwide director for HP’s Critical Facilities Services group.

Some are skeptical that companies will pick China as a base for providing IT services internationally. “There are questions around ownership rights for data and other assets,” said IDC analyst Michelle Bailey.

A former security consultant who worked on data center projects in China said foreign companies have three main areas of risk: local employees absconding with data, traffic being monitored or interfered with, and the loss of equipment during sudden “inspections” by Chinese police.