China’s clampdown on the use of virtual private networks (VPNs) to circumvent the country’s internet controls risks disrupting businesses that depend on them for cloud services and data security.
Besides using virtual private networks to gain access to Web sites like Facebook and Google blocked by China’s regulators, companies use VPNs to ensure speed and efficiency as they migrate more services to the Internet cloud, and to ensure that data moving across those networks is secure, US-China Business Council vice president Jake Parker said.
China is said to have told telecommunications carriers to block individuals’ access to VPNs — services that skirt censorship restrictions by routing web traffic abroad — by Feb. 1.
The apparent acceleration of a crackdown comes as Beijing prepares to host the 19th Chinese Communist Party Congress, a sensitive time during which leadership reshuffles are expected and the government tightens its grip over media.
Some businesses worry that the crackdown, which for now is said to target mainly individual users, could expand and end up hurting their operations.
EUROPEAN SURVEY
More than a fifth of foreign businesses responding to a European Chamber of Commerce survey conducted this year said that existing Internet restrictions affected more than one-tenth of their in-country revenue.
“Any kind of restriction on VPNs operating in the China market would be a disruptive influence on businesses operating here,” Parker said in a Bloomberg Television interview.
His organization represents and assists about 200 US companies from Intel Corp to Microsoft Corp.
“What we’re seeing is a focus on stability moving up into the 19th congress, which is likely one of the reasons why restricting Internet access is something that’s going on now,” he said.
While VPNs are widely used by businesses and individuals to view banned Web sites, the technology operates in a legal gray area.
The Chinese Ministry of Industry and Information Technology pledged in January to step up enforcement against unauthorized VPNs and warned corporations to confine such services to internal use.
SERVICE HALTED
At least one popular network operator recently said it had run afoul of the authorities: GreenVPN notified users it would halt service from July 1 after “receiving a notice from regulatory departments.”
Companies operating on Chinese soil will still be able to employ leased lines to access the international Web, but must register their usage of such services for the record, people familiar with the matter have said.
Yet quite apart from a wider crackdown on VPNs, foreign businesses have long complained about the damaging effects of unreliable Internet access.
The survey published by the European chamber found that unstable connections, slow Internet speeds and restrictions on access have “seriously impacted” its members.
About a quarter of respondents reported lower productivity, difficulties in exchanging data and documents with their headquarters, partners and customers, and an inability to properly search for information and engage in research, according to the survey.
In this year’s survey, 22 percent of respondents estimated that the restrictions translated to an economic impact of more than 10 percent of their annual revenue in China, compared with 16 percent in 2015.
Many foreign firms now rely on VPNs to get through to common applications such as Google Docs that employees in other countries use.
They have been known to quicken connections to cloud-based software — such as Salesforce.com Inc’s — that is not expressly blocked in China, Parker said.
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