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Apple's compliance with China's cyber security law mutually beneficial

A 3D printed Apple logo is seen in front of a displayed cyber code in this illustration taken March 22, 2016. Photo: Reuters 

Apple's decision to open a data center in China is widely regarded as a move to comply with a regulation requiring foreign companies to keep digital data on computers located within the country, but the move will also be beneficial to the iPhone maker as foreign technology companies are used to complying with Chinese rules in exchange for market share.

Recently, the Cupertino, California-based firm announced plans to set up its first-ever data center in the southern province of Guizhou to "improve the speed and reliability" of the iCloud services for Chinese customers. The Guizhou data center will store photos, videos, documents and other personal information uploaded to iCloud accounts by Apple's Chinese users.

Previously, Apple had moved some of the Chinese users' data to China. But this time, it went a step further to have the Guizhou data center run by a local data management firm named Guizhou-Cloud Big Data Industry. The Chinese firm, which is co-founded by the Guizhou provincial government, is also responsible for managing the sales of iCloud services in the country and addressing legal requests for data from the Chinese government.

The Apple announcement to establish a data center in China came more than a month after the enforcement of a newly approved cyber security law requiring foreign companies to store data within Chinese borders and cloud services to be operated by Chinese companies. The new cyber security law has been criticized by some Western experts who believe that it will make it easier for the Chinese government to pry into personal data through legal means, specially in the face of the threats of cyber attacks and terrorism.

However, Apple defended its commitment to its data privacy and security protections in a statement, which rooted out the likelihood of creating backdoors in any of its systems, meaning the government-owned Guizhou-Cloud Big Data Industry will be unable to obtain the information stored in iCloud accounts without Apple's permission.

Meanwhile, the Chinese government has explained that the new cyber security law is not designed to put foreign companies on the hip, despite the fact that the country is carrying out an ambitious industrial policy aimed at making Chinese companies global leaders in areas of information technology, robotics, electric car, aviation and so on.

Apple is not the only Western companies to set up a date center in China. Several big technology companies including Microsoft, IBM and Amazon have already made similar agreements to establish data centers in the country to meet the requirements of the Chinese government.

Similar foreign technology companies have even taken a further step to strengthen cooperation with the Chinese partners, in a sharp contrast to the old days when these companies seized the Chinese market by virtue of the overwhelming technological advantages.

In 2015, IBM announced its decision to share its technologies regarding semiconductor chips, IBM architecture-based servers and software running on those machines with Chinese companies, in a makeshift strategy the Big Blue adopted partly because of China's xenophobic technology policy calling for more use of Chinese-owned technologies at the cost of the foreign ones. In the same year, Dell opened the Strategic Innovation Venture Fund to China's early-to-growth-stage companies as part of its "In China, For China" strategy. Dell's move also came as China was carrying out the mass entrepreneurship and innovation and Internet plus policies, a new national strategy adopted at a time when the country has entered a "new normal" phase of slower economic growth.

Apple has joined the ranks of its American peers by announcing plans to establish two more research and development centers in China this year.

Mutual benefits

Lisa Jackson, Apple's vice president of environment, policy and social initiatives, has hailed the partnership with Guizhou province to establish the data center as the company's renewed effort to improve Chinese iCloud users' experience by reducing delays while raising reliability.

Jackson's remarks have been echoed by Ma Ningyu, the Guizhou provincial government's deputy secretary general and director of the province's big data bureau, who described Apple's move as the largest investment and most influential project since the province adopted a strategy to develop big data technology. "It (Apple) will take a leading role in helping Guizhou develop its cloud computing industry," Ma said.

The government of Guizhou province aims to build the impoverished southern province as China's data center capital with a mission to attract more talents and professionals to work there by introducing the high-technology facilities like Apple's data center that will be powered by renewable energy. So far, a number of famous enterprises such as Alibaba and Hewlett Packard have set up facilities in Guizhou as the province is cultivating the cloud service industry.

Experts said that establishing the data center in China could help Apple expand the iCloud user base and reduce the costs of data storage and transmission in the country, which currently accounts for about 20 percent of Apple's revenue.

"It is inevitable that Apple will establish a data center in China, as the development of the mobile Internet industry urgently needs the technologies of cloud computing and big data," Wang Yanhui, secretary general of the Mobile China Alliance, said, adding that Apple would continue to focus on localizing its services in China considering the differences in policy and users' habits.


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