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Apple Is Setting Up a Data Center in China, to Comply With a Tough New Law

Published on .

Customers look at the Apple Inc. iPhone 7 and iPhone 7 Plus at the Apple Store inside the IAPM shopping mall in Shanghai, China, on Friday, Sept. 16, 2016
Customers look at the Apple Inc. iPhone 7 and iPhone 7 Plus at the Apple Store inside the IAPM shopping mall in Shanghai, China, on Friday, Sept. 16, 2016 Credit: Qilai Shen/Bloomberg
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Apple will establish its first data center in China to speed up services such as iCloud for local users and abide by laws that require global companies to store information within the country.

The new facility, which will be entirely driven by renewable energy, will be built and run with local partner Guizhou-Cloud Big Data, Apple said in a messaged statement. Apple aims to migrate Chinese users' information, now stored elsewhere, to the new facility in coming months. The data center is part of a $1 billion investment by the iPhone maker in the province of Guizhou.

The data center was partly driven by new measures that bolster control over the collection and movement of Chinese users' data, and can also grant the government unprecedented access to foreign companies' technology. Forcing companies to store information within the country has already led some to tap cloud computing providers with more local server capacity.

"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 in its statement. "Apple has strong data privacy and security protections in place and no backdoors will be created into any of our systems."

Apple's partner was co-founded by the government of Guizhou, which has begun promoting the impoverished mountainous central province as the country's data center capital. It hopes the high-tech facilities will bring white-collar jobs to the region best known as the home of China's fiery national alcoholic beverage, baijiu.

Working more closely with the Chinese government is an important step for Apple's business in the country, which is the tech giant's second-largest market globally. Apple's iTunes Movies and iBooks service were shut down by the State Administration of Press, Publication, Radio, Film and Television last year after less than seven months of operations. Its market share has also fallen as consumers wait for an updated iPhone 8, which is likely to be released later this year, or switch to cheaper Android devices.

Since then Chief Executive Officer Tim Cook has visited China to attend forums and open research centers while meeting with local media to boost the brand's reputation there.

--Bloomberg News