Sources: MIIT suspends Ali Cloud partnership

Sources close to the Ministry of Industry and Information Technology, China's top industry regulator, said the ministry suspended Alibaba Cloud as a cooperative partner of its cybersecurity threat information sharing platform for six months.

21st Century Business Herald, based on an internal MIIT document about the cloud computing arm of Alibaba Group Holding Ltd, also reported the case.

Alibaba Cloud and MIIT did not immediately respond to requests for comment.

But, knowledgeable sources close to the ministry, speaking on the condition of anonymity, said on Wednesday the suspension came after Alibaba Cloud failed to report a major cybersecurity loophole to the ministry in time.

The company, they said, failed to effectively support the ministry's efforts to manage cybersecurity threats and vulnerabilities.

Once the suspension period elapses, the ministry will study whether or not to resume Alibaba Cloud's identity as a cooperative partner based on its efforts to rectify its operations, they said.

Experts said the reported move came amid China's increasing emphasis on cybersecurity, and as data security becomes a prerequisite for digital economic prowess.

MIIT said earlier this year that it plans to step up the development of data security products and services, as part of a broader push to cultivate China's cybersecurity industry into a 250 billion yuan ($39.25 billion) sector by 2023.

The ministry also said that more efforts are needed to enhance capabilities in data management, with a focus on ensuring security in the storage, transfer and privacy of data.

It called for more efforts to build capabilities in intelligently managing data, optimizing data classification and strengthening data protection, on top of preventing data theft, tampering and leaking.

Last year, the market size of China's cybersecurity industry exceeded 170 billion yuan, twice the size of 2015, said the China Academy of Information and Communications Technology, a Beijing-based think tank.

As of 2020, China had more than 3,000 enterprises engaged in cybersecurity-related business, covering network security equipment, services, software and system integration, the academy said.

Wu Hequan, an academician at the Chinese Academy of Engineering, said data security is of increasing importance, with the accelerated digital transformation of China.

Data security is not just about technology companies. It is also becoming increasingly relevant to companies in traditional sectors, as the real economy becomes intertwined with the digital economy, and as more industrial, manufacturing and medical data go online, Wu said.