Photo: Reuters
Photo: Reuters

Shackling data flows

Companies based in Chinadomestic and multinationalare increasingly constrained

Over the weekend, Apple was compelled by the Chinese government to pull VPN apps from its China App Store. VPN or virtual private network software allows users to bypass firewalls—even those imposed by governments to block specific sites or services.

In June, Beijing introduced a cyber security law that puts encryption and all data flows in and out of China under government control. Companies based in China—domestic and multinational—are increasingly constrained: from no longer being able to access basic services such as Gmail and news that hasn’t been run through government filters, to the difficulty of accessing information necessary for business decisions.

Indeed, as the Financial Times has reported, a European Chamber of Commerce survey earlier this year showed that such restrictions were having a significant impact on companies’ revenue.

China presents what could be an intriguing test of the economic implications of government control of data.