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It’s well known that global companies can face challenges doing business in and out of China due to the country’s unique rules, regulations, and norms, not to mention recent political and trade complications. Less well known is that China’s logistical and technical network infrastructure is also quite different from the rest of the world’s. With global Internet traffic up 30% over the past month due to the pandemic, these logistical and technical hurdles are increasing the burden for global businesses at exactly the wrong time. It’s now not unusual for someone based in China to have to wait extended periods and often be unable to access applications hosted elsewhere, or vice-versa, due to the lower performance of international Internet traffic to and from China. This affects global companies with customers, suppliers or employees in China, and Chinese companies who are trying to reach global users.
Our mission is to help build a better Internet, for everyone, everywhere. So, today we’re excited to announce a significant strategic partnership with JD Cloud & AI, the cloud and intelligent technology business unit of Chinese Internet giant JD.com. Through this partnership, we’ll be adding 150 data centers in mainland China, an increase in the region of over 700%. The partnership will also enable JD to provide a Cloudflare-powered service to China-based customers. As a result, it will create a one-stop solution for companies both inside and outside of China to go truly global.
Cloudflare’s Long Experience in China
Cloudflare has helped our global customers deliver a secure, fast, and reliable Internet experience for China-based visitors since 2015 and we’ve served Chinese customers since our inception. Cloudflare customers currently are able to extend their configurations with the click of a button across data centers in 17 cities in mainland China. As a result, they’re able to deliver their content faster, more securely, and reliably in-country. The demand for the service has been overwhelming, and we’ve been exploring ways to provide our customers with a network that would have an order of magnitude greater coverage.
China’s Balkanized Network Architecture
What we’ve learned from our experience is that having a widely distributed network and world class partners in China matters more there than almost anywhere else in the world. To understand why, it’s important to understand the specific technical and logistical hurdles that exist there.
China has a non-uniform technical and network infrastructure, directly impacting Internet performance. Mainland China has three major telecom carriers—China Telecom, China Unicom, and China Mobile—serving 22 provinces, 4 municipalities, and 5 autonomous regions. In many of these places, each carrier operates a distinct network and in some provinces more than one network, that in many cases, operate independently of one another. The result is many different sub-networks that need to be coordinated.
Regulatory hurdles in the network space can also present challenges. Unlike the rest of the world, where Anycast routing is generally available, in China the three main ISPs control IP address allocation and routing for customers’ networks both inside the country and globally. Small or large companies rarely own their own IP address allocations, and even fewer use BGP to control Internet routing. Because of the lack of BGP and the static allocation of IPs, the carriers’ customers operate on IP addresses that are homed onto a single network’s backbone.
The combination of this single-homed IP connectivity and the fragmented network topography leads to frequent bottlenecks between the various domestic ISPs. This makes network coverage all the more important. Add in a rapidly expanding economy with growing Internet activity, and extraordinary times such as these which puts even more strain on the Internet, and it's easy to see why situations regularly occur where too much traffic is paired with too little capacity.
The Challenge of Putting Boots on the Ground
Compounding these hurdles further is that, from a business and logistics perspective, China is similarly a collection of sub-markets. There are huge variations between provinces in terms of population levels, average income, consumer spending, and the like. Regional business regulations also vary dramatically. Although it is slowly opening up to outside competition, the Chinese transportation and logistics market is one of the most highly regulated in the world. Regulation exists at a number of different tiers, imposed by national, regional, and local authorities. Finally, there are shortages of high-quality logistics facilities and warehousing spaces, making it hard to find domestic providers for managing import, export, and local transportation as well as trade compliance. You often have to hire consultants who specialize in the China market to assess quality, trustworthiness, and other factors.
This makes it challenging both for foreign companies seeking a fast, secure, and reliable Internet experience but also, as we often hear from our customers, to navigate China more generally.
The Importance of a World Class Local Partner
Given these technical, logistical, and regulatory complexities, it’s very difficult for foreign companies to navigate the China landscape without local expertise. Partnering with JD Cloud & AI provides not only local expertise, but also a relationship with one of the world’s largest logistics, e-commerce, and Internet companies, JD.com.
JD.com is a juggernaut, operating at a scale that’s rare among global companies. It’s China’s largest retailer by revenue, online or offline, with one billion retail customers, a quarter billion registered users, seven million enterprise customers, and $83 billion in 2019 revenue. Its highly automated logistics system uses robots, AI, and fleets of drones to cover 99% of China’s population.
JD decided several years ago to open its technology platform to its enterprise customers and began offering cloud services through a new business unit called JD Cloud & AI. JD Cloud & AI has quickly become the fastest growing cloud company among the top five Chinese providers. It offers a full range of services across eight availability zones in China and has made security and compliance a key part of its offering. In line with its parent company, JD Cloud & AI has made serving a global audience a key part of its strategy and has partnered with the likes of Microsoft and Citrix to build on this strategy. Importantly, like Cloudflare, the company has continued to invest in its infrastructure through the current pandemic, and has been critical to keeping China’s supply chains flowing and its businesses functioning.
Taking International Companies Into China & Chinese Companies Global
Our partnership with JD Cloud & AI will allow international businesses to grow their online presence in China without having to worry about managing separate tools with separate vendors for security and performance in China. Customers will benefit from greater performance and security inside China using the same configurations that they use with Cloudflare everywhere else in the world.
Using Cloudflare's international network outside of China, and JD Cloud & AI’s network inside of China, any enterprise can rapidly and securely deploy cloud-based firewall, WAN optimization, distributed denial of service (DDoS) mitigation, content delivery, DNS services, and Cloudflare Workers, our serverless computing solution, worldwide. All with the click of a button within Cloudflare’s dashboard and without deploying a single piece of hardware.
For those customers who need it, we also expect JD.com to be able to help with in-country logistics. JD operates over 700 warehouses that cover almost all the counties and districts in China. It has over 360 million active individual consumers and seven million enterprise customers that purchase products on its platform. For Cloudflare customers interested in reaching these Chinese end-customers, no matter where they are located in China, JD.com will be able to help.
The partnership with JD Cloud & AI will also allow us to help Chinese companies reach global audiences. JD Cloud & AI will use Cloudflare's international network outside of China, and the JD Cloud & AI network inside of China, to allow any China-based enterprise to use Cloudflare’s integrated performance and security services worldwide, all seamlessly controlled from within the JD Cloud & AI dashboard.
As always, we’re taking care to be thoughtful about the treatment of customer data with this partnership. Cloudflare operates all services outside of China, and JD Cloud & AI all services inside of China. No Cloudflare customer traffic passes through the China network unless a customer explicitly opts-in to the service. And, for Cloudflare customers that opt-in to proxying content inside China, traffic and log data from outside of China is not stored in the China network or shared with our partner.
A One-Stop, Truly Global Solution
We are excited about this new partnership which will help us continue to offer customers the best performance and security service available anywhere in the world — and as a one-stop solution. While we can’t control the trade and political climate, which will inevitably ebb and flow over time, we can help our customers with technical and logistical challenges they may face doing business around the world, especially in these challenging times.
New and existing Cloudflare customers can request to be served in China by filling out an information request at https://www.cloudflare.com/china.