Handling Client User Data In China

Edwina Chung, Client Director at Racepoint Global

By agreeing to store iCloud user data locally, Apple will fall in line with Chinese cybersecurity laws: but what does this mean for foreign businesses in China?

A public WeChat post from China Telecom revealed that Apple’s Chinese iCloud partner, Guizhou-Cloud Big Data, has confirmed a deal with the state-owned company to move user data to its servers. The change in operation will mean data from iCloud users based in China, including emails, pictures and text messages, will now be hosted by the state-run service.
Apple explains that the move to store user data locally was made to comply with Chinese authorities and local cybersecurity laws. However, since the new move was announced, it has led to concern from privacy advocates – who are worried that this undermines Apple’s claim to take its users’ data seriously, and will enable the Chinese government to access personal information more easily. Apple confirmed in a statement: “While we advocated against iCloud being subject to these laws, we were ultimately unsuccessful.”

But is it all doom and gloom?

One benefit that can be seen from this move is the opportunity to present a clearer communication strategy with customers on where and how their data will be stored, which could generate more transparency and trust in the brand. However, the assurance that no backdoor would be built for the Chinese government, while the company is storing data domestically, and that user data won’t be vulnerable to state surveillance, will be crucial.

Here’s what businesses looking to operate in China can do:
The move serves as a stark reminder and cautionary tale to all businesses looking to operate in China – read the fine print and understand the requirements of the Chinese government first in order to sell products overseas.

Additionally, companies must consider and prepare a robust external and internal communication strategy to share with both existing and potential stakeholders the impact to their data to help alleviate any concerns. In fact, providing them with transparency is an effective way to establish a trusted relationship that can lead to further success.
To start today, industry organisations like China-Britain Business Council, which helps UK companies grow and develop their businesses in China, can become a strong go-to consultant for advice on Sino-British business relations.