(Yicai Global) Sept. 10 -- The Lingang Special Area of Shanghai’s free trade zone was today approved to set up a new type of internet exchange center to lower the cost of corporate network access and boost network speed. The go-ahead makes Shanghai the fourth Chinese city authorized to build such digital infrastructure.

The Ministry of Industry and Information Technology gave the go-ahead to Lingang, located in the southeast of Shanghai, to establish the new ‘internet traffic hub,’ it said on its WeChat account today.

The Chinese government has been promoting the construction of internet infrastructure in recent years. This new type of exchange center can directly open up interconnection channels between different telecom, internet, cloud service, and content delivery network companies.

It can also simplify the process of inter-network traffic exchange, solve problems, including ‘data loss,’ in the traditional exchange process, and improve the quality and efficiency of interconnection between firms.

Lingang said that when the center begins operations, the quality of network latency-sensitive services, including industrial control and high-frequency financial transactions, as well as high real-time traffic services, including short video, 4K/8K high-definition video and virtual reality or augmented reality, will be significantly improved.

This will ensure effective application of these technologies in the real economy, it added.

Prior to Shanghai, Hangzhou in east China, Shenzhen in south China, and Zhongwei in northwest China’s Ningxia Hui Autonomous Region were allowed to set up new-type internet exchange centers. All three have been built and are now operational.

Editor: Peter Thomas