China is planning to build a so-called “free trade port for data” in the Nansha district of the city of Guangzhou in the southern Chinese province of Guangdong north of Hong Kong in order to be able to control cross-border data traffic. The report of the Chinese state newspaper Nanfang Daily According to the Chinese government plans to provide 31.8 billion yuan, about 4.4 billion euros, in funds for the project.
The Nansha International Data Free Trade Port is a trial project for cross-border data transfer. According to current planning, it comprises a landing station for global submarine cables, a data center for processing cross-border data traffic, a central transmission hub, industrial parks for big data and various development laboratories for telecommunications and artificial intelligence for the areas of Hong Kong, Macau and nine mainland cities in Guangdong province. The aim is to support cross-border trade, offshore financing and the AI industry, it says from the official side.
After completion, the project on the 450 hectare site is likely to be an important component in the data exchange between China and the outside world. There are currently many data centers of multinational companies located in Hong Kong, where data from mainland China is collected and managed.
This is obviously a thorn in the side of the Chinese government. In September 2021, it tightened controls on cross-border data traffic with a Data Security Law (DSL) that came into force on November 1. Among other things, it provides severe penalties for the unauthorized collection, processing, storage and use of data. This primarily refers to data that affect the national and economic security of China or are of important public interest in the country. To this end, the Ministry of Industry and Information Technology recently developed new regulations that are intended to prevent important industrial and telecommunications data from leaking out of China.
According to data from Nanfang Daily construction is scheduled to begin in the first half of 2022. Corresponding partnership agreements between the local government of Nanshas and the digital infrastructure company China Aviation Cloud as well as financing loans with banks have already been concluded. Completion and commissioning of the complex is planned for 2025.