China invests billions in cross-border data control project

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China plans to build a so-called “Data Free Trade Port” in Nansha District in the city of Guangzhou, south China’s Guadong Province, north of Hong Kong, to control cross-border data traffic. The report of the Chinese state newspaper Nanfang Daily according to the Chinese government plans to allocate 31.8 billion yuan, about 4.4 billion euros, in funds for the project.

Nansha International Data Free Trade Port is a pilot project for cross-border data transfer. According to the current planning, it will include a global submarine cable landing station, a data center for processing cross-border data traffic, a central transmission hub, big data industrial parks and various development laboratories such as telecommunications and artificial intelligence for the Hong Kong area, Macau area and nine mainland cities of Guadong Province. The aim is to support cross-border trade, offshore financing and the AI ​​industry, according to the official side.

However, once completed, the project on the 450-hectare site is likely to be an important building block in data exchange between China and the outside world. Hong Kong is currently home to many data centers of multinational companies that collect and manage data from mainland China.

This is obviously a thorn in the side of the Chinese government. In September 2021, it tightened controls for cross-border data traffic with a data security law (DSL) that came into force on November 1. Among other things, it provides for harsh penalties for the unauthorized collection, processing, storage and use of data. What is meant here is primarily data that relates to China’s national and economic security or is of important public interest to the country. To this end, the Ministry of Industry and Information Technology has recently drawn up new regulations intended to prevent important industrial and telecommunications data from flowing out of China.

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According to data from Nanfang Daily Construction is scheduled to begin in the first half of 2022. Corresponding partnership agreements between the local government of Nansha and the digital infrastructure company China Aviation Cloud as well as financing loans with banks have already been concluded. Completion and commissioning of the complex is scheduled for 2025.


(olb)

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