Cloud Solutions in China - What Businesses Need to Know

What is Cloud Technology and How Does It Work in China?

Cloud technology (also known as ‘cloud computing’) is when servers, storage, databases, networking, software, and analytics are hosted on the Internet and stored in large privately-owned data centers.

Instead of investing in physical hardware, businesses subscribe to these services and pay either a monthly or annual fee determined by the amount of data and number of users a business requires. Employees can access business applications online while company data is backed-up either online or in a physical data center.

Using Cloud technology not only allows business to save money on IT costs, it also keeps employees around the world better connect with their colleagues, clients, and partners.

In China, data centers that store and connect user data are ‘isolated’ from global networks.

The Chinese government requires that data related to the privacy of its citizens, or connected with the country’s physical and digital infrastructure, must be stored in mainland China. This means that although cloud-users outside China can still communicate and collaborate with their China-based colleagues, both must use separate user accounts and thus cannot access company data from a common source.

Similarly, companies headquartered outside China can still manage China-based company systems and data by using a Chinese user account. However, these users will experience slower connection rates.

What are some key considerations when choosing Cloud solutions for China operations?

Choosing a China-based cloud over its international counterpart is a matter of local regulation. Foreign investors should exercise diligence in selecting cloud services that meet regulatory requirements without compromising internal privacy.

Data residency

China’s Cybersecurity Law mandates that critical information infrastructure (CII) operators must store certain important data, including personal information relating to Chinese citizens, inside Mainland China.

When companies use their own on-premise servers to host data, this requirement is typically fulfilled. However, when hosting data on a cloud platform, businesses are obligated to ensure that this data remains within China. The easiest way to fulfill this requirement is to use a China-based cloud provider.

Privacy

For companies with their own on-premise servers, the responsibility of the security and privacy of their data would fall on the strength of the implemented systems. Companies requiring cloud services from external sources should ensure providers guarantee vigorous privacy policies and that data is not shared with third parties.