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State-owned Enterprises Ordered to Migrate to State-owned Cloud Services

China’s national data security law went into effect on September 1, 2021. Just days before it became effective, the China State Council’s State-owned Assets Supervision and Administration Commission (SASAC) for Tianjin issued a directive mandating state-owned enterprises in Tianjin to accelerate data migration from cloud services of tech companies like Alibaba and Tencent to the state-owned infrastructure. Currently, Alibaba, Huawei, and Tencent dominate the cloud computing market in China.

In a directive dated August 12, 2021, Tianjin’s SASAC directed state-owned enterprises in Tianjin not to build new data centers, or purchase servers and other storage hardware. State-owned enterprises cannot renew or sign new contracts with cloud platforms owned by Huawei, Alibaba, Tencent, China Unicom, China Mobile, and China Telecom. Data stored in these platforms must be migrated to cloud platforms controlled by SASAC within two months of the expiration of existing contracts, with the final deadline being at the end of September 2021.

Section 3(3)(1) on page 7 of the SASAC directive reads, “The data of state-owned enterprises are state assets and must be put under state-owned assets supervision and administration…”

Since early 2021, local SASACs have started local state-owned cloud platform projects. The essence of “state-owned cloud” is to shift from a cloud platform hosted by a third party to a state-owned cloud built and operated by local state-owned enterprises. In March 2021, Tianjin state-owned cloud started operation, with three state-owned enterprises, including Tianjin Communications Group and Tianjin State-owned Capital Investment and Operation Co., Ltd. In March, the SASAC of Zhejiang Province also initiated a project that included a state-owned cloud platform. In April, SASAC of Sichuan Province officially kicked off its state-owned cloud platform.


Lianhe Zaobao, September 4, 2021

State-owned Assets Supervision and Administration Commission of Tianjin, August 12, 2021

Yicai, September 7, 2021