Chinese cloud computing companies, such as Huawei, Alibaba, Tencent, and Baidu, have been making inroads in many parts of the world, including Latin America, raising national security and data privacy concerns.
Chinese firms’ growth in cloud business impact many critical areas such as 5G, artificial intelligence, robotics, autonomous vehicles, and biotechnology — essential elements of emerging technologies, U.S. digital media agency The Hill reported.
“China has gone beyond copying U.S. technology, transforming it into proprietary systems and devices for the market, with more attractive costs,” Victor Ruiz, founder of the Silikn cybersecurity center in Mexico, told Diálogo. “Now, their focus is turning to cloud services, a trend that will become more relevant in the coming years.”
According to the Georgetown Journal of International Affairs, the Georgetown University peer-reviewed journal, the cloud computing market will reach $2.3 billion by 2032, driven by its importance in security and development. Currently, three major U.S. technology companies dominate the market.
China’s push to get the upper hand in building cloud networks raises fear that the country may gain access to sensitive data and may lead to greater technology dependency. There are serious concerns over the Asian country’s intelligence laws, which allow access to personal data without user consent, The Hill reported. This approach, it added, contrasts with the U.S. perspective on strict data security and governance.
Constant threat
Chinese cloud services are extending their reach into U.S.-partner countries and developing nations worldwide, The Hill reported. Huawei’s entry into Chile in 2019, has been linked to the country’s proximity to Antarctica and the presence of Amazon and Google data centers in the country, Latin American online publication Telesemana reported.
According to Telesemana, Huawei’s data center in Mexico was established to compete with internet connectors in Dallas and Miami, monitor traffic, and be a storage hub for Central America, the Caribbean, and Andean countries not covered by its hub in Chile.
In November 2023, Alibaba Cloud launched its public and private cloud computing services, with networks and different options for companies and industries in Mexico, seeking to replicate this impact in Latin America, mass consumer news site América Retail reported.
“Chinese cloud services are backed by the Chinese government itself for their development and international expansion,” Ruiz said. “This position gives them ample capacity and advantage to operate on a large scale, having unlimited resources to access markets that would otherwise be inaccessible or require more time to reach.”
Google, Amazon, and Microsoft, the leading global cloud service providers, adhere to stringent regulations worldwide. Chinese cloud service providers, meanwhile, try to avoid complying with laws, controls, and guidelines imposed by other governments, Ruiz said.
As such, the rise of Huawei and other Chinese companies is also a concern for civil liberties advocates because of their strong ties to the Chinese government, whose undemocratic regime and history of zero respect for human rights have been denounced repeatedly, Telesemana reported.
Technological dependence
“We face a clear technological dependence on China. Cell phones are an obvious example, since most of these devices include Chinese components,” Ruiz said. “The Asian country is advancing considerably in this market and is now looking to expand its dominance to other technologies, such as cloud services.”
Attracted by their lower cost, users are unaware of the implications of purchasing these products, such as tapping, data theft, and espionage, which China exploits to its advantage, Ruiz added.
He emphasized the importance of raising awareness about security in Chinese cloud services and not to be dazzled by their lower cost, because in the long run, cheap is expensive. He also stressed the need for local companies to develop their own technology or look for more secure options.
“If there isn’t more investment in technological research and development in Latin America, there is a risk of depending exclusively on China in the future. Their heavy investment in this field could mean […] compromising information privacy and our own security,” Ruiz concluded.