An engineer checks power at a cloud computing center in Xiangyang, Central China's Hubei Province, in November. Photo: VCG

Pending US curbs on Chinese companies' access to cloud services provided by US companies will come at a high cost for businesses on both sides, particularly the US side, forcing Chinese firms to find service providers elsewhere, Chinese experts said.

The US is considering measures to restrict China's access to cloud computing services as Washington pushes to curb Beijing's efforts to develop artificial intelligence (AI) capability, Nikkei Asia reported on Saturday, quoting a senior US official.

Experts said the US restrictions are of political manipulation, which will backfire on normal business operations, including the US companies. 

Some Chinese companies operating abroad and relying on American cloud computing services will be affected, but US companies will bear the brunt if such curbs take place, Ma Jihua, a senior industry analyst, told the Global Times on Sunday.

"The possible impact on US companies will be head on, which will reduce their business revenue, and impact companies like Amazon, Google Cloud and Microsoft," Ma said.

For example, both Amazon Web Services (AWS) and Microsoft Azure hold substantial market share in China. In the Chinese public cloud IaaS+PaaS market, AWS holds an 8.6 percent share, following Alibaba Cloud, Huawei Cloud, China Telecom Tianyi Cloud and Tencent Cloud, according to media reports.

Since Chinese companies count them as major service providers, it will inevitably have a negative impact on US businesses and affect their revenue and profits, Ma noted.

Ma said that if Chinese companies can't use American cloud services, "the US companies might be unable to use Chinese cloud computing either, as a possible reciprocal countermeasure," he said.

The majority of cloud computing companies in the world are in China and the US, and if a Chinese company can't use American cloud services, it might have to resort to third-party alternatives, or build its own cloud services, the expert said.

The pending US move came days after the US Commerce Department said on Tuesday that it would halt exports of AI chips, making it tougher for US firms including Nvidia and Intel to sell existing products in China, the Wall Street Journal reported.

On Wednesday, China's Ministry of Commerce blasted the increased restrictions imposed by the US on chip exports to China and pledged to implement appropriate measures to safeguard China's rights and interests.

"The US is urged to remove its chip export restrictions on China and build a fair and predictable business environment for companies from other countries, including China. The US should join hands with all parties to build a safe, stable, highly efficient, open and inclusive and win-win global industry chain," the ministry said.

The intensified measures targeting China and Chinese companies send a clear message that the Biden administration is committed to its "small yard and high fence" strategy, aiming for further "decoupling" from China, despite the strong cooperation that businesses on both sides have built up over the years, Zhou Mi, a senior research fellow with the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Sunday.

"The US government is largely short-sighted and more politically driven rather than market-driven, so their primary concern often revolves around short-term interests," Zhou said.

Global Times