When deciding how to host your website, the choices that immediately come to mind include AWS, GCP, and Azure. There are good reasons for these choices – they are all global hosting provider leaders that have 58 percent of the cloud market as of 2021, according to the analyst, a research firm in the technology sector. However, the hosting landscape in China is quite different. Both AWS and GCP are not listed as the top hosting providers in China. Instead, the list is topped by local hosting companies like Alibaba, Huawei Cloud, Tencent Cloud, and Baidu AI Cloud.
The main reason AWS, GCP, and Azure are not the leaders in China is due to restrictions imposed by the Great Firewall of China (GFoC). Over the last two decades, the Chinese government created the GFoC to regulate Internet traffic in China, which has resulted in restrictions placed on many global companies and websites, including Google, YouTube, Facebook, and Twitter. These GFoC restrictions have created enormous problems for big players like AWS and GCP in the Chinese cloud hosting market. The top four cloud service providers such as Alibaba, Huawei, Tencent, and Baidu, now account for 80% of the country's total cloud spending.
Even though the U.S. is the largest economy in the world, China is set to overtake the U.S., and become the global leader in GDP – a trend that has been hastened by the onset of the pandemic. Hence, businesses are showing a keen interest in starting their businesses in China. However, the Great Firewall's restrictions are major hurdles for new businesses wanting to operate within the Chinese economy.
More interesting facts on Starting an online business in China.
Using CSPs like AWS, GCP, or Azure in China
One of the main reasons businesses choose local hosting service providers is that most Chinese search engines like Baidu, Sogou, and Shenma will not index websites outside China. To overcome this problem, AWS has partnered with local service providers like Sinnet and Ningxia Western Cloud Data Technology Co., Ltd. (NWCD) in the Beijing and Ningxia regions, respectively. However, customers cannot directly access AWS services, making it troublesome to use services from AWS or any other Cloud Solution Provider (CSP).
Sinnet and NWCD can provide AWS services to people in mainland China in compliance with the Chinese regulations. Businesses looking to sign up for AWS services in China need to provide a valid business license or permit. However, AWS China is not connected to the AWS global network, and to optimize the connection, AWS has collaborated with a local Chinese ISP, China Telecom. Unfortunately, managing multiple environments with multiple providers increases the chances for a determination of regulatory non-compliance.
The Great Firewall restrictions concerning hosting providers
The Great Firewall of China (GFoC) is one of the most extensive Internet censorship programs in the world. The objective of the program is to filter certain foreign websites in China, and it utilizes various techniques and tactics to enforce this Internet censorship. It has significant power over the Internet gateways and has the ability to analyze and filter Internet traffic in and out of China. One of the main reasons for this censorship is to make citizens use Chinese alternatives and to promote the Chinese economy.
For foreign businesses and hosting providers, it means they must abide by strict rules and regulations established by the Chinese government or risk being banned from the country.
Is bypassing the China Firewall illegal?
The Chinese authorities do not take it lightly when someone tries to bypass the Great Chinese Firewall, especially when it does not align with their guidelines. However, although you may not be able to bypass the Chinese Firewall on an individual level, if you are a corporate entity using VPN applications the Chinese authorities have approved, you are allowed to bypass the Chinese Firewall to some extent for business purposes.
How do I bypass the Great Firewall of China?
Even though bypassing GFoC is not (officially) legal in China, businesses that conduct business outside China need to obtain clearance by the Chinese government for using VPNs. There are also some government-approved VPNs available for use, but these VPNs are constantly screened by Chinese officials. Hence, if you need to conduct business activities smoothly, hiring an expert service provider can go a long way.
Know more about the pros and cons of using VPNs in China.
The Great Firewall of China’s effects on the performance of websites outside China
The Great Firewall comes with multiple layers of analysis and filtering; it is not transparent, and you may not know your website is being blocked. The only thing that you may notice is connection timeouts, connection errors, or the site seems to be taking an extended time to load. Some of the techniques used by GFoC are:
- Deep Packet Inspection
- Multi-layered URL filtering
- IP Address Block
- Connection Reset
- DNS Spoofing
Therefore, your business website may not function properly, or in some cases, may not load at all in China if it has not been hosted from within the Chinese mainland or the approved regions.
Know more about how DNS Anycast works behind the Great Firewall of China.
Challenges local Chinese players pose to AWS and GCP
According to Statista, within a span of just four years, from 2018 to 2021, the annual revenue of Alibaba cloud has soared from $2.135 billion USD to $9.176 billion USD. While Amazon is a reseller, Alibaba is a marketplace. Hence, Alibaba makes higher profit margins relative to Amazon (Alibaba 23.3% vs. 4.1% AWS). Hence, Alibaba is left with more cash to invest in other services and offerings, and listed below are ways in which Alibaba poses a challenge to both AWS and GCP:
While AWS provides only 175 services, Alibaba comes in with a mixed bag of 300 solutions and 597 products. Hence, you can assume every type of business can take advantage of at least one of these products or solutions. Since the target audience for Alibaba ranges from small business owners to big corporations, you can expect there will be a product/solution from cat food to financial needs.
Another reason businesses choose Alibaba over AWS and GCP is because of the way Alibaba provides an easy way to port your application over to the Alibaba cloud. Traditionally, when migrating your application, you will be offered a proprietary database and some tools for migration.
Alibaba has taken the migration process to a new level through PolarDB, the main database of Alibaba, which was created to be compatible with most of the popular databases.
Cloud Enterprise Network (CEN)
Alibaba comes packed with its enterprise network called the Cloud Enterprise Network (CEN) to provide better connectivity for your applications running across different regions. While other cloud service providers rely on the public Internet for connectivity, the CEN is a fully distributed network system that makes region-to-region networking fast and easy.
Tips to boost your website speed in China.
Things you should keep in mind while selecting a hosting provider in China
Factors that you need to consider when choosing a hosting provider in China:
Obtaining an ICP license
If you are looking to host your website in China, you must remember to obtain an ICP (Internet Content Provider) License. Without an ICP license, you are not legally allowed to host a website in China, and it is mandatory to display your ICP license number in the footer of your website. ICP licenses have two categories, specifically, commercial and non-commercial licenses. If you are a business owner looking to obtain an ICP license, you need to submit all your business documents. Obtaining an ICP license is similar to obtaining a business permit in China. ICP licenses take roughly three weeks to get approved, and after a certain period, you need to get your license renewed to keep your license active.
One more vital factor to consider while choosing a hosting provider is to select one that provides the best-in-class customer service. You may need to choose a hosting service that offers customer support in English, as most providers only offer support in their local language, Chinese.
.cn vs .com domains
Even though .com domains command higher authority than the local .cn domains, owning a .cn domain improves your chances to be approved for an ICP license quickly. Moreover, you have a better chance of escaping the strict censorship policies of the Great Firewall. Previously it has been difficult for foreigners to get a .cn domain, restrictions were loosened to allow anyone to own a .cn domain.
Learn more about whether you need a .cn domain or .com domain for your business in China.
Selecting a hosting provider outside China
It is true you can host your website in nearby regions such as Hong Kong, Taiwan, Japan, and Korea, allowing your website to have better speeds and not be banned. However, there are several aspects you should consider.
One example is Google Cloud – one of the most popular cloud hosting platforms next to AWS, which has rolled back its plan on providing hosting services in China. With the cloud market dominated by Alibaba, Tencent, Huawei, and Baidu and along with the restrictions imposed by the Chinese government to keep sensitive data intact within the country, Google concluded it is best to pause any cloud ambitions in China. Hosting providers such as AWS have taken the challenging path of collaborating with local partners to enable people to enjoy the benefits of AWS cloud services. However, this collaboration does not always offer a smooth experience for the users. Near-China hosting offers limited performance capabilities relative to a proper China-based host. However, if your main goal is achieving some level of China visibility, near-China hosting is likely to work. Websites that host static content and basic interactivity are better suited for near-China hosting over sites that offer streaming content or complex features.
If you own or manage a new business looking to penetrate the Chinese market and your strategy involves creating a website for your organization in China, in most cases the best strategy is to host your website in nearby regions. This would eliminate the hassles of obtaining an ICP License and complying with other formalities. However, if you need to feature streaming content or complex features and require website hosting in China, you will have to select the best cloud hosting option. GoClick China can help you navigate this complex landscape and provide you with comprehensive solutions for hosting your website in China. To learn more about how you can successfully capture the online Chinese market, you can check out our other articles.