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Remember the theatrical congressional hearing on TikTok in March? – i.e the grilling of CEO Shou Zi Chew. Well, the US government’s suspicion of Chinese tech firms has only grown. Now they are turning their attention to Chinese cloud companies.
Only a few days ago we heard that Daniel Zhang is giving up his role as CEO and Chairman of Alibaba to head up the Alibaba cloud arm as it undergoes a spin off. The move highlights the growing strength of the cloud computing market in China.
In the US, Chinese cloud companies make up only a tiny proportion of the market that is largely dominated by Microsoft, Google and AWS. However, they’ve been seeing huge growth in other regions, such as Asia and Latin America.
US Restrictions on China’s Tech Industry
The US is considering what sort of restrictions they could impose on these cloud companies to reduce the perceived security risk. The New York Times has reported that Biden has sought advice from cloud computing companies Google, Microsoft and Amazon. It’s thought this critique of Chinese tech firms by the US government will put further strain on the relationship between the two countries.
Biden is continuing Trump administration’s work. They attempted to hinder attempts by telecom companies Huawei and ZTE to work on the 5G rollout. They also targeted TikTok and Grindr. Alongside this, they restricted Chinese involvement in undersea internet cables.
Huawei’s smartphone business was restricted by previous government efforts. But they still operate in US wireless network. The US government has also failed to force ByteDance to divest from TikTok. This week, foreign affairs official, Wang Yi met with Secretary of State, Anthony Blinken and urged him to stop interfering in China’s technological development.
Why Are They Afraid of Chinese Cloud Companies?
The US government’s fear of China’s tech companies, now includes it’s cloud companies. The main focus of concern is with Chinese owned data centres on US soil. In April, nine republican senators wrote to Biden’s team to insist they investigate Huawei, Alibaba, Tencent and Baidu. They claimed these companies are a threat to national security.
Under certain circumstances China’s government can request access to Chinese cloud companies’ records. This can happen no matter what country they operate in. It’s feared that this could comprise not only user privacy but US government security. It’s seen as particularly worrying in the case of data centres. In theory, a foreign government could gain access to the data stored in or passing through servers in the US.
The state department has concerns about wireless equipment, undersea telecom cables and satellites. The US has begun to discuss this issue with other governments. The Biden adminisitatoin worry about the potential competitive advantage held by Chinese cloud companies who recieve government subsidies. To counter this, the US government is looking into ways to support competitors.
Conclusion
Security is definitely an issue throughout cloud computing. Of course any tech company that holds user data, like social media for example, needs to be held to account. When considering this issue on a geopolitical scale it becomes ever more complex. It’s clear that the US government is taking this issue seriously. Do you think they’re right to be concerned?
