Doing Business in China: Digital Infrastructure

infrastrutture
13 Sep 2018
The Internet is one of the pillars of globalisation, but new knowledge is needed to find the right approach as regards China.

Thanks to good international connectivity, the communication limits between Western and APAC countries' infrastructures have decreased compared to a few years ago. It is also possible to rely on international providers for the effective deployment of technology architectures and applications.

Differences between West and East tend to be uniform, but China is still a case apart. In order to understand the differences between the international network and the Chinese network, we need to re-discuss concepts that we take for granted in the West. Bear in mind that communications to and from China are administered by the government, which can at any time decide to block certain content, domains or any types of connection.

Legislation and Domain

In the West, we are used to registering a domain in a very short time and with minimum control on the content to be published, in compliance with the regulations in force. Chinese legislation, on the other hand, requires an ICP (Internet Content Provider) licence to publish content on the network. This must be requested from the Ministry of Industry and Information Technology (MIIT) and can only be issued to a Chinese legal entity. ICP licences for companies normally come in two types and their release time may take several weeks:

  •          ICP Filing (ICP Beian), for domain or pure communication web-based services;
  •          Commercial ICP Licence, if the service enables transactions with the end user, as in e-commerce.

If correctly requested, an ICP licence may be applied to all third-level domains (www.acme.cn, store.acme.cm, api.acme.cn) belonging to the registered domain. This allows for different services to be provided and websites to be published under the same domain, thereby simplifying any subsequent steps.

Granting the ICP licence is also linked to the scope of application. Wholly Fully Owned Enterprise (Joint Venture) companies may qualify for an ICP Beian licence, but legal advice is appropriate.

Infrastructure

Peering is one of the foundations of the Internet infrastructure. This is a convention that enables the free flow of information and data between operators. A sort of pass, in short, which is valid for all the states in a continent. However, in China this assumption is not always respected and the data often follows a longer and more tortuous route. This leads to an increase in latency times in content use. As a result, hosting a website or web-app on a server located in China is not, in itself, a guarantee of speed.

A good way to remedy this problem is to use a CDN service (Content Delivery Network). This is based on the ability to automatically replicate static content, such as HTML pages, videos and images in multiple geographical areas with a positive impact on loading times. Several Chinese providers offer high-quality services in this regard.

 

By using a CDN service, it is also possible to accelerate content located on infrastructures outside the "Great Firewall". Your site's contents are first copied to a Chinese server and then distributed over the network. Until recently, it was possible to directly replicate a site located on international territory but the guidelines are now much more restrictive.

As the CDN replicates the content on Chinese territory, it is necessary to obtain a Beian ICP licence on the domain, in order to comply with local regulations. A good alternative, without legal prerequisites, is the creation of your own infrastructure in Hong Kong, China's special administrative region. This brings about positive effects, such as the possibility to carry out cross-border e-commerce.