The law requires companies to store Chinese users’ information in China, and Apple’s move suggests other foreign technology companies may have to do the same.
SHANGHAI — Apple has set up its first data center in China, setting the tone for how foreign companies will handle a strict new law requiring them to store Chinese users’ information in the country.
The center in the southern province of Guizhou, part of a $1 billion investment there, will be operated with a local data management company, Apple said on Wednesday.
As is the case with many Chinese laws, the digital security regulations approved last month were vaguely worded, leaving many foreign companies uncertain which parts would be enforced and how. That Apple, easily the most successful foreign technology company in China, is locally hosting data with the help of a Chinese partner suggests that others will most likely have to do the same.
Apple said in a statement on Wednesday that the new center would keep “strong data privacy and security protections in place, ” adding that no back doors would be created in its systems.
“The addition of this data center will allow us to improve the speed and reliability of our products and services while also complying with newly passed regulations, ” the company said.
The rules also call for security reviews and for users of messaging apps to register their real identities. The regulations are part of a wider Chinese industrial policy put into place to build local capabilities. For example, a government plan called Made in China 2025 names several industries, like robotics and electric cars, in which it hopes its companies will become leaders. Foreign business groups have said the laws unfairly discriminate against nondomestic companies.
In China, the iPhone is a symbol of middle-class ambitions, but it has also become emblematic of a long reliance on foreign technology. As a result, the state news media has occasionally taken aim at Apple for everything from its after-sales policies to software that shows a user’s commonly visited locations.
Foreign companies like Apple have had to adapt in other ways to stronger government scrutiny as well, often by helping expand Chinese technological capabilities. For instance, Apple announced this year that it would establish two research and development centers in China. Last year, it invested $1 billion in the Chinese ride-hailing service Didi Chuxing.
Apple has been far more profitable in China than most of its Western peers, but that success has come with pushback from the government. More than a year ago, Apple’s iBooks Store and iTunes Movies were shut down in China, six months after they were introduced there.
In December 2016, complying with what it said was a request from the Chinese authorities, Apple also removed news apps created by The New York Times from its app store in China. Apple did not specify what had prompted the request. The company also must undergo “security audits” on new models of the iPhone before gaining approval to sell them in China.
Although Apple’s partnership with the local company, Guizhou-Cloud Big Data Industry, is its first foray into building a data center in China, other Western companies like Microsoft and IBM have run their own China-hosted cloud services for several years.
