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China may provide foreign cloud service providers with greater access

CKN
minutes 2019/04/24 07:48:02
2,025
ministry of industry and information technology; cloud services; foreign companies

Apr 24, 2019 (China Knowledge) - China’s Ministry of Industry and Information Technology has said that it is looking to cooperate with foreign companies to explore new ways to further reform and open its cloud services market, potentially providing further access for foreign companies to enter the world’s fastest growing cloud services market.

Currently, foreign companies who are looking to break into the country’s cloud computing market do so with the help of a domestic partner through various cooperation agreements. However, authorities are now considering a “liberalization pilot” project in one of its free trade zones to allow foreign companies to operate without a domestic partner.

The proposal for the new “liberalization pilot” is part of a solution brought forth by Chinese authorities in hopes of resolving the current trade dispute with the US to address some of the technology-related issues the latter had brought up.

US cloud services providers such as Amazon, Microsoft and Apple had previously made heavy investments to enter the Chinese market but have had their progress hindered by regulations that require them to form joint ventures and license their technology to local partners to enter the market.

China is now the world’s fastest growing cloud services market growing by more than 70% year-on-year to USD 7.2 billion. Chinese companies are still market leaders with Alibaba taking first place with a more than 43% market share as of the first half of 2018. Amazon which currently ranks first among foreign players ranks fourth with just a 6.9% market share.

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