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What we know better about China cyber security law

A Chinese law intended to tighten Cybersecurity within that country's borders are now in effect. We wrote about this development earlier this year, just ahead of its formal enactment. That post provided a general overview of the burden it would place on foreign companies looking to do business in the People's Republic of China.

In the months since, the effects of the law are beginning to show. For example, Reuters reports that Inc., decided to sell off the hardware component of its Chinese public cloud service business. A Chinese partner company Amazon works with is the purchaser.

In a statement, Amazon Web Services in the U.S. said the reason for the sale was to comply with Chinese law. At the same time, the company offered assurances that AWS remains "excited about the significant business we have in China and its growth potential."

As we noted in the earlier blog post, the new law requires companies operating inside China to keep individuals personal data stored on servers in the country. It also requires the firms to let authorities review the data periodically.

Analysts say the law represents a censorship crackdown by the government. China describes it as protecting cyber sovereignty. Some legal observers say the language of the law about its application is so broad that virtually every international business operating in China is affected.

Other major firms reportedly addressing the legal complexities include Microsoft Corp., Oracle Corp. and IBM Corp. Apple Inc., too, has turned local data over to Chinese-based ventures.

Compliance with any law can be costly. In many instances, it is simply the price of doing business in a lucrative market. Finding the most effective and legal way to deal with such hurdles always requires unique skill.

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