Nearly Half of US Businesses Operating in China Concerned with Data Security: Study

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Forty-seven percent of American businesses in China say data security is their greatest concern with cloud computing, up one percent from a year ago, according to a survey released this week.

The 16th annual China Business Climate Survey Report, conducted by the American Chamber of Commerce in the People’s Republic of China (AmCham China) also indicates internet censorship is a hindrance to the majority of respondents.

Two-thirds of the 365 AmCham China members reported that blocked search engines “negatively or somewhat negatively” affected their business.

Non-computing issues also challenge businesses in China, as 48 percent said air pollution is making it difficult to recruit and retain executives.

Data security is surely on the minds of many who did not cite it as their main concern with cloud computing as well, since 68 percent consider Chinese IPR enforcement ineffective. Ineffective enforcement may be the least of foreign businesses’ concerns with Chinese government agencies, as Mandiant reported in 2013 that a specific unit of the People’s Liberation Army was hacking companies, many of them American.

China suffered a major internet outage in January, which highlighted both challenges with access in China, as well as tensions between the US and China over data and network security.

Despite these issues, optimism about China’s business climate and cloud adoption continue to drive investment by American companies. Intel announced it was investing in three Chinese cloud companies in February, and a number of US companies have entered or expanded their presence in the Chinese market by partnering with Chinese companies, which avoids a licensing issue also indicated in the AmCham China report. Both Microsoft and IBM announced partnerships with major Chinese data center operator 21Vianet last year.

China’s government is certainly keen to expand cloud computing in the still fast-growing market, as shown by its recent commitment to invest $1 billion in cloud development over the next few years.

Much less certain is whether it will be able to stay out of its own way.

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