Examining the Chinese Influence on International Data Control


International concerns over Chinese policies and procedures are nothing new. Yet with the growth of the Chinese economy to becoming where it stands today as the biggest in the world, new concerns have arisen regarding exactly how far Chinese influence will continue to be felt in the international business market.

One area that many look to with equal amounts of curiosity and trepidation is the potential impact that Chinese data control policies may have to international information systems. Those concerns may prove to be well-founded given the emphasis that Beijing has placed on cloud development in recent years.

Despite the many resources at their disposal, including their massive amounts of human capital, the Chinese have failed to be viewed as true players on the international data management stage. Some of the factors hindering the Chinese data collection and storage industry include:

  • Fewer innovations in core chip development
  • Lack of realistic means of energy efficiency
  • Insufficient visualization support
  • An inability to truly rely on the performance of domestic data centers

To overcome these obstacles, the Chinese solution has been to deal with them much the same way they have dealt with other issues: by throwing money at it. As the Chinese have shown in recent years, they’re willingness to spend their way to solutions has helped to bridge the gap between themselves and foreign competitors. Chinese spending on IT was estimated to be at $323 billion in 2013. While that still lags significantly behind the U.S. expense of $819 billion, it does serve notice to the rest of the world that the Chinese data management industry is a force to be reckoned with. That rise in spending also coincided with an announcement by the Chinese government that they were preparing to invest $1 billion in domestic cloud development.

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The Growing Chinese Cloud Infrastructure

The concerns presented by an increased Chinese influence in the cloud computing market shouldn’t go unnoticed. Unlike U.S. informational policy, the Chinese are very clear that the technical requirements behind their cloud computing will never be shared with the public. Furthermore, the stated goal of Chinese cloud development is to focus on what they call “indigenous innovation” in developing cloud technologies that will help shield and protect Chinese companies from their foreign competitors.

Despite this apparent lack of willingness to share in their cloud infrastructure innovation, China has encountered no shortage a major international telecommunications players who are jumping at the chance to establish a foothold in their market. To these requests, the Chinese government has been more than accommodating, provided that such partnerships are formed on their terms.

Chinese Data Control Concerns

One of these terms that many foreign companies have had to deal with are the tight data controls imposed by the Chinese government.  While China does not have an official national framework to regulate the use and disclosure of data, its State Secrecy laws allow for threats to national security to be used as justification for almost total control over data privacy (or lack thereof). Governmental controls have even been suggested requiring private telecommunications companies to report leaks of what are deemed to be state secrets. Foreign companies have cited these restrictive controls as having a significant impact on their businesses. Now, with an increased emphasis being placed on cloud computing, many of those same companies have greater concerns over their data security. A recent study showed that nearly 47% of the American businesses currently operating in China were worried about the potential impact Chinese cloud technologies could have on their data management.

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Yet perhaps even more concerning is the Chinese insistence on foreign companies utilizing only Chinese data resources in providing services to Chinese consumers. In some cases, that has resulted in the disclosure of sensitive information to Chinese government officials. An example of this that an American audience can appreciate is Microsoft being compelled to share the full source code for Microsoft Windows and its other core products. The obvious fear inherent with this is that Chinese intelligence services may now have the understanding needed to penetrate foreign systems.

Such fears may be well justified. Recently, IS watchdog groups are reporting that Chinese government officials have been telling Apple iOS service providers to issue fake trust certificates  that allow them to fool iOS users into thinking they have secure connections. This particular attack method allows them to spy on users and collect their iCloud data. These accusations come just on the heels of Apple introducing its new iPhone 6 to the market, where it’s estimated that over 100 million people will be using it. To support this increased user traffic, Apple recently announced that it would also begin storing data on Chinese servers. Apple, for its part, claims that its encryption won’t allow Chinese data center providers to access any stored content.

Enter the “Hacktivists”

Yet despite the Chinese attempts to place such restrictive controls on the business and personal data circulating throughout the country, in many areas, their efforts simply haven’t caught up with the technology of the day. A growing movement of both domestic and foreign “hacktivists” has been hard at work in recent years in developing ways for users to work around governmental controls. A large part of their work has been to exploit holes in firewalls that allow users to go to sites deemed to be renegade by the government. They’ve also helped educate users on tactics like avoiding banned terms and inserting odd characters into statements much the same way that American spammers use to bypass e-mail filters.

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What exactly will the Chinese influence be in the coming years and what sort of data will they control? The answer to that question remains a mystery. What is clear is their commitment to improving their data management capabilities and the resources that they have at their disposal to do so. Given the heft that those resources provide, plus the Chinese track record at effectively adopting innovation into their culture, it’s safe to assume that their digital footprint will soon be felt the world. Should domestic companies and even private citizens be concerned about that? That remains to be seen. Speaking strictly from a business information standpoint, industry experts like those at Hanei Marketing will continue to keep a close eye on Chinese development and to help American business networks be prepared to deal with the challenges that their Chinese counterparts are sure to present.

Top image ©GL Stock Images


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