US biz could be allowed to fire up their own data centres beyond the Great Firewall of China

But only if trade talks are successful

Chinese government could open the local data centre and cloud market to US firms as part of a deal aimed at ending the ongoing trade tariff war between the two countries.

The olive branch was revealed at talks between Premier Li Keqiang and representatives of major western business including IBM, Pfizer and BMW, according to the Wall Street Journal.

At the moment, western companies can only gain access to the rapidly growing industry by partnering with Chinese firms. Apple's data centres in China are run by Guizhou-Cloud Big Data Industry; Microsoft and IBM partnered with 21Vianet; AWS data centres in Beijing are operated by Sinnet, and in Ningxia – by Ningxia Western Cloud Data Technology Co. Meanwhile, Oracle has partnered with Tencent, a Chinese tech holding company that briefly overtook Facebook's market capitalisation in 2018.

Major Chinese cloud firms like Alibaba, Tencent and Huawei are growing rapidly in their homeland and have benefited from the lack of international competition. None of these businesses have any limitations on their operations in the US or Europe. Last year, Alibaba passed IBM to become the world's fourth largest cloud vendor, claimed Synergy Research.

According to the WSJ, Chinese authorities would be willing to consider a pilot project, with foreign-owned data centres located in a special free-trade zone – and the city of Guiyang was fingered as a potential location.

Officials stressed that any companies operating in the country would still have to comply with China's strict data residency and cybersecurity rules, passed into law in 2017.

If all goes to plan, the scheme could eventually be rolled out across the country.

The proposal will be discussed once again as part of broader trade talks in Beijing on Friday, and in Washington next week. The objective for the US is to increase the amount of goods it exports to China, while Chinese officials want to reduce the tariffs on the country's exports to the US.

Topics to be discussed also include protection of intellectual property and exchange of data across borders, currently restricted by China's censorship mechanism, popularly known as the Great Firewall. ®

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