I don't have too much to add about china specifically but it might be useful to explore if the "social and environmental costs" would be so high if it wasn't developing in a capitalist framework?
As far as I understand, a lot of the environmental/community harms are multiplied in a rush to hoard resources and build up capacity for which there isn't yet a need.
Because of the rush to bring capacity online (whether or will be used or not) and because infrastructure has been so neglected throughout the western world, the data centres are monopolizing power generation and transmission, leaving others to pick up the cost of expansion and maintenance.
Lack of power in places where land is cheap or where there are significant perks for businesses means on site power generation with things like diesel generators is seen as a valid solution.
The same situation arises for cooling. Water cooling is the cheapest in places where water is cheap and regulations are limited, but this is a detriment to infrastructure and the environment. Air cooling or closed loop liquid cooling has a much lower impact, but is more expensive and limits where you can build.
If there was no incentive to chase higher and higher valuations, would the same decisions be made?
To be clear, I have no idea how china is handling these problems. I would believe there is a sort of AI arms race going on as well, so perhaps removing capitalism wouldn't mean better, more sustainable choices are made.