On 25 November 2016, the Ministry of Industry and Information Technology, China’s telecommunications and Internet regulator, issued a draft Circular on Regulating Business Activities in the Cloud Services Market for public comment (“Draft Circular“). The stated aims of the Draft Circular are to improve the cloud services market environment and further regulate business activities in this sector. In addition to introducing a number of minimum service requirements that cloud operators must observe, the Draft Circular is of particular interest to the industry due to the rules it sets out for market participation by foreign technology companies, including through cooperation with license holders in China. The period for public comments on the draft ended on 24 December 2016.
The cloud market is currently experiencing a period of explosive growth in China, with Chinese Internet titans Tencent, Alibaba, Baidu and others vying with Amazon, IBM, Google, Microsoft and other international cloud computing giants to develop and capture the public, private and hybrid markets. According to the 2016 Cloud Computing White Paper released by the China Academy of Information and Communications Technology in September 2016, the overall size of China’s cloud computing market in 2015 was RMB 37.8 billion, with a growth rate of 31.7%, meaning China’s share of the global market has risen from 3.7% in 2012 to 5%.
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