In 2022, for instance, four data centres were built in Singapore. Two contracts were awarded to Chinese-backed companies, while two were given to US-backed companies. This shows both China's desire to expand overseas and its uneasy balancing act with the USA.
To see this overseas investment in action, let's turn our gaze to Saudi Arabia.
The Chinese cloud in Saudi Arabia
In September 2023, Huawei opened up a new cloud service centre in Saudi Arabia. The company's president of marketing and sales described it as "our focus in serving the Middle East, Central Asia and Africa". In the same year, Tencent Cloud partnered with Saudi Arabia's telecoms service Mobily.
Conflict with the USA
When talking about China's cloud market, it's impossible not to consider the effect of the ongoing US-China trade war. This began in early 2018 when Donald Trump began setting tariffs and other trade barriers on China. Biden inherited these measures and has so far left them in place.
One example of this would be the restrictions placed on China getting US microchips. Similarly, Biden floated the idea in the summer of 2023 of getting US cloud service providers to seek government approval before providing Chinese companies with AI cloud services.
Taken globally, cloud provision is
political. In the words of Trey Herr, director of the Atlantic Council's Cyber Statecraft Initiative under the Digital Forensic Research Lab (DFRLab):
"Cloud computing was political from the beginning… and it will be political at the end."
This is largely because of the physical nature of cloud resources. He goes on: "It requires a tremendous amount of physical infrastructure and all of that infrastructure has to sit somewhere. So there are the local politics of the jurisdiction it lives in."
Despite this ongoing conflict, China remains ambitious in its cloud market aims.
What's next for China?
These factors notwithstanding, 2023 saw a boosted global presence for Chinese cloud providers thanks to the frantic hype around generative AI – and in October of that year, the government announced it would double its cloud computing market by
2025.
An announcement isn't a prediction, of course – and governments worldwide are prone to declaring that growth will happen come what may. But given China's rapid economic expansion, this 100% increase may not be too wide of the mark.
Conclusion
China is a global player in the cloud market. However, its prospects are mixed thanks to a combination of slow growth at home and restrictions on trade abroad. Whatever else happens, it seems likely that providers will continue to look overseas, as well as at home, to invest and expand.
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