Apple set to build first China-based data centre as regulations harshen

The tech giant has been forced to build its first data centre in China in order to meet the country’s new cybersecurity laws

  • By Rachel Connolly | Wednesday, July 12th, 2017

Under new cybersecurity laws, foreign companies will be required to store all online data relating to national security in China

On July 12, Apple announced plans to build its first China-based data centre, indicating the tech giant is prepared to comply with new cybersecurity laws. Apple will partner with local data management firm Guizhou-Cloud Big Data Industry to develop the facility, which is part of a $1bn investment project in the Guizhou province.

The announcement follows the implementation of a new law requiring foreign companies to store all online data relating to national security in China. The vague wording of the law, along with the bulk nature of data collection, means companies must store all data collected from Chinese customers in China.

US tech firms have traditionally processed all customer data – regardless of origin – in US-based centres, so will be forced to invest substantially to meet the new requirements. Apple’s announcement, and the $1bn cost of the Guizhou project, reflects the expensive concessions tech companies must make in order to gain access to China’s highly lucrative consumer market. Apple’s planned centre will store all information including photos and private messages from the iPhones of Chinese customers.

Chinese authorities claim the law is not intended to harm foreign business, but a necessary response to the recent rise in online hacking and security breaches

The law has been met with concerns from tech company officials, who accuse the Chinese Government of putting unreasonable restrictions on their Chinese operations, hampering competition. Chinese authorities claim the law is not intended to harm foreign business, but a necessary response to the recent rise in online hacking and security breaches.

Privacy campaigners have also expressed concerns that data will be less secure, with processes behind accessing citizens’ data varying considerably in China and the US, where all Apple data is currently stored.

Apple attempted to dispel any privacy concerns in a statement to Reuters: “As our customers know, Apple has strong data privacy and security protections in place and no backdoors will be created into any of our systems.”

Apple added the new infrastructure would help to improve customer experience: “The addition of this data centre will allow us to improve the speed and reliability of our products and services.”

As reported by the Financial Times, other US tech firms (such as Microsoft, IBM and Amazon) already offer cloud services in China, meaning they have the infrastructure in place to comply with the law.