Foreign investment in cloud services is heavily restricted in China. For years, international cloud operators have been struggling to identify structures that address regulatory concerns, but at the same time enable a service delivery model that is consistent with international offerings. Teaming up with Chinese companies is not something new, but it has become a more prominent feature in the cloud space following certain regulatory developments in 2017, notably new licensing requirements issued by the Ministry of Industry and Information Technology (“MIIT”), China’s telecommunications industry and internet regulator, as well as the implementation of PRC Cyber Security Law (the “Cyber Security Law”).
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