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Expanding Your Digital Presence into China: A Guide to Compliance and Success
Dec 26, 2024 • 7 Minute Read • Elizabeth Spranzani, Chief Technology Officer
With the second-largest population in the world and over a billion internet users, China presents an incredible opportunity for businesses looking to boost revenue and brand reach. But establishing a strong digital presence in China is not as simple as replicating your existing website. China's digital landscape is complex, governed by stringent laws and controls that can slow down, block, or even ban your site if it doesn't meet local requirements.
This topic has come up recently for some of Verndale's clients who are making the move from on-premise servers hosting their websites to SaaS solutions like Sitecore's XM Cloud and Optimizely's SaaS Content Management System (CMS). The concern is about data residency and whether they're in compliance with the needs of local customers in various regions, whether that's Canada, Europe, or as far as China.
The first important point to understand, is that the CMS becomes truly just a content and website orchestration system, and ideally there's no customer data or Personal Identifiable Information (PII) in that platform anymore. Therefore, where the vendor is hosting the managed system for administering the CMS itself becomes irrelevant. What becomes more important is where the website for the end user is delivered from, and in this headless architecture, that's going to be in a CDN that's within the user's region. So compliance should not be an issue.
That said, China does have a lot of rules and there's simultaneously a lot of information and yet not enough on this topic out in the wild. We've synthesized most of it in a guide to help provide clarity on navigating the unique legal, performance, and searchability challenges of establishing a successful digital footprint in China.
The Opportunity and Complexity of China's Market
China is an unparalleled market for businesses looking to expand globally. However, with this opportunity comes a host of requirements beyond those seen anywhere else in the world. A few factors stand out:
- Strict Government Oversight: China's government enforces a high level of control over online content, driven by the need to protect national security and maintain social stability.
- The Great Firewall: A combination of technological and regulatory measures, the Great Firewall controls both content and access, requiring websites to meet specific standards or face slowdowns, blocks, or outright bans.
- Cultural Sensitivity: Chinese social values and political concerns shape the type of content permissible on the internet, restricting content that violates the constitution, jeopardizes national security, or disrupts social stability.
Navigating these factors is critical for any organization that wants to connect with Chinese consumers.
The Great Firewall: Digital Gatekeeper and Enforcer
To operate online in China, you must first understand the Great Firewall, a set of legal and technological controls that monitor and restrict content. It filters or blocks sites that fail to comply with Chinese standards, creating a twofold challenge: (1) keeping content legally permissible and (2) optimizing performance so users can access your site without frustration.
Key Considerations for Compliance
The Great Firewall's controls touch every aspect of a website's operation:
- User Data Localization: Article 37 of China's Cybersecurity Law requires personal and sensitive data collected from Chinese users to remain within China. Violating this rule can result in being placed on a block list.
- Content Restrictions: Websites must avoid certain types of content—such as any material that could compromise state security or promote superstition or extremism. Content that "incites racism," promotes feudal superstitions, or criticizes national heroes is strictly prohibited.
- ICP Licensing Requirements: A business must obtain an Internet Content Provider (ICP) license to host any website within China. This license certifies compliance with China's regulations and is mandatory for ecommerce sites. Loss of an ICP can result in being placed on a block list, so organizations must vigilantly maintain license requirements, including hosting the website in China and updating license data when necessary.
Legal Compliance: What Your Website Must Do to Remain Accessible
With legal compliance, your website will reach your Chinese audience. Here are the primary steps required to remain accessible within China:
- ICP License Acquisition: Businesses need a local domain (.cn) to an in-country server and a physical presence in China or a partnership with a local entity to gain an ICP license. For ecommerce sites, a commercial ICP is required, whereas informational sites can secure a basic ICP Filing.
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Chinese Data Regulation Policies: China enforces data residency requirements for PII through strict guidelines:
- Redaction: PII data can only leave China with explicit user consent and approval from the Cyberspace Administration of China (CAC).
- Replication: With consent, data can be replicated to global servers, but the primary copy must remain within China.
- Restriction: Sensitive data remains stored only in China, with read-only access granted to international teams.
Tools like InCountry for Salesforce can simplify compliance by storing PII on local instances while enabling access for foreign entities.
Performance Challenges: Making Your Website Work Efficiently in China
Delivering a fast, reliable website experience in China involves addressing significant performance obstacles:
- Long-Distance Data Travel: With China's vast geographic area and restrictions on global CDNs, websites hosted in the U.S. or Europe often load slowly.
- CDNs and Accelerators:
- China-Based CDN: Utilizing a local CDN, like those offered by Alibaba or Tencent, optimizes performance by caching content close to Chinese users.
- Near-China CDN: If hosting in China isn't feasible, a near-China CDN in neighboring regions (e.g., Japan, South Korea) can be a practical compromise.
- Global Accelerator (GA): A GA optimizes data flow between international servers and Chinese users for dynamic content and real-time interactions, reducing latency. Providers like AWS, Microsoft Azure, and Alibaba Cloud offer GAs that use optimized routing to ensure a smooth user experience.
- Managing Third-Party Blocks: Popular Western services such as Google, YouTube, Facebook, and Twitter are blocked in China, which can disrupt content-dependent site elements. Therefore, it's essential to either replace or exclude these integrations for users in China.
CDNs address STATIC assets delivered on your primary domain, but websites aren't serving content and data from just one application and source. A web page is likely a conglomeration of DYNAMIC information coming from multiple sources and back-end services: also known as a composable application. Global accelerators and API gateways can address latency in data flow, optimizing the route between user and data sources. However neither of these can help when a 3rd party domain is completely blocked or significantly slowed.
Solutions like Chinafy and 21YunBox can create a China-optimized proxy of your main website by scanning for slow or blocked content and dynamically replacing it with compliant equivalents. Additionally, 21YunBox helps deploy CDNs and API accelerators within China while assisting with ICP licensing and other white glove services to ensure success in China.
Findability Concerns: Getting Discovered on China's Web
Compliance and performance won't matter if Chinese users can't find your website. Baidu, China's primary search engine, prioritizes websites that adhere to local standards, including:
- Chinese Domain (.cn): Using a Chinese domain shows commitment to local users and is favored by Baidu.
- China-Hosted: Websites delivered from a China IP address will receive preferential treatment (and required to even obtain an ICP license). This means the CDN / Server from which it is being delivered from should be inside mainland China.
- ICP License Display: Including the ICP number in your site footer signals legitimacy to users and search engines.
- Simplified Chinese Content: Localizing content in Simplified Chinese will optimize user engagement. This goes beyond translation—cultural nuances in language, image selection, and brand tone are equally critical.
Strategic Solutions to Overcome Challenges
With legal, performance, and findability requirements covered, the next step is identifying practical solutions that simplify compliance and deliver a seamless user experience. Here are some recommended approaches:
- Use a Single Optimized Site with Regionalized Features: If managing multiple site versions is challenging, a single site optimized with solutions like Chinafy or 21YunBox can simplify operations.
- Deploy a CDN and Global Accelerator: Combining both can ensure optimal content delivery while balancing compliance requirements.
- Engage Partners for Compliance Support: ICP application and compliance monitoring can be complex. Leveraging third-party solutions or local agencies can streamline these processes.
Checklist: Essential Guidelines for Success in China
Whether you're exploring the market or committed to a full expansion, these guidelines provide a solid foundation:
- Purchase a .cn Domain: Register with a China-based provider to establish local credibility.
- Acquire an ICP License: Secure the appropriate license and host your site on China-based servers or CDNs.
- Implement a China-Based CDN and Global Accelerator: These tools are critical for delivering a high-performance experience.
- Partner with Compliance Experts: Solutions like 21YunBox and Chinafy help optimize performance and compliance, saving you time and resources.
- Adapt Content for Searchability: Ensure your site is optimized for Baidu by using a Chinese domain, displaying the ICP license, and translating content into Simplified Chinese.
Navigating China's digital ecosystem has its challenges. Yet, the potential for growth is vast for organizations willing to invest. With proper preparation and partnerships, your brand can tap into one of the world's largest, most dynamic consumer bases.