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“While we advocated against iCloud being subject to these laws, we were ultimately unsuccessful,” it said. Apple said it decided it was better to offer iCloud under the new system because discontinuing it would lead to a bad user experience and actually lead to less data privacy and security for its Chinese customers.
As a result, Apple has established a data center for Chinese users in a joint venture with state-owned firm Guizhou - Cloud Big Data Industry Co Ltd. The firm was set up and funded by the provincial government in the relatively poor southwestern Chinese province of Guizhou in 2014. The Guizhou company has close ties to the Chinese government and the Chinese Communist Party.
The Apple decision highlights a difficult reality for many U.S. technology companies operating in China. If they don’t accept demands to partner with Chinese companies and store data in China then they risk losing access to the lucrative Chinese market, despite fears about trade secret theft and the rights of Chinese customers.
BROAD POWERS
Apple says the joint venture does not mean that China has any kind of “backdoor” into user data and that Apple alone – not its Chinese partner – will control the encryption keys. But Chinese customers will notice some differences from the start: their iCloud accounts will now be co-branded with the name of the local partner, a first for Apple.
