Doing business globally often introduces regional and country-specific complexities. China, with its fast-growing economy and significant manufacturing sector, has its fair share of these complexities. Businesses in China are facing challenges as they accelerate their digital transformation in response to the global pandemic, which has increased demand for reliable and cost-effective digital infrastructure and connectivity services. These services include enabling cross-border commerce, with businesses in China connecting to the rest of the world and businesses in the rest of the world connecting to China.
In this blog, we’ll explore the factors contributing to these challenges, such as reliance on the public internet, and discuss how virtual infrastructure and software-defined interconnection can transform network performance and connectivity to and from China. Data from the Global Interconnection Index (GXI) Volume 5 shows just how much businesses will rely on interconnection going forward: the GXI forecasts that private interconnection bandwidth will be 15x larger than the public internet by 2024.
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There are two main drivers for improving connectivity and network performance:
- As of November 1, 2021, companies doing business in China need to maintain data locally, to meet Personal Information Protection Law (PIPL) regulations. This new data privacy law in China is focused on protecting personal information and solving personal data leakage. These regulations also apply to those who process the data of China’s citizens outside of the country.
- Companies based outside of China must overcome the challenge of accessing networks in a heavily regulated telecommunication sector. There is a specific set of conditions that must be met for compliance with local cybersecurity laws. The regulations require businesses to contract with specific network service providers (NSPs) and internet service providers (ISPs) to connect to their cloud and SaaS services and data centers located inside and outside of China. This often requires additional hardware and/or dedicated network connectivity services that increase complexity, limit business agility and require CAPEX investments. With the current hardware supply chain issues, the fulfillment of a physical kit order may take six to nine months. Related challenges might include requesting and scheduling a truck roll or hiring onsite labor to complete the install, move or reconfigure and maintain a piece of equipment.
Businesses that rely on the public internet to adhere to these strict regulations are struggling with high latency, low bandwidth, unstable connections, packet losses, mixed levels of quality and the high cost of connecting to and from China. Fortunately, there are easily accessible and cost-effective options that simplify and lower the costs of connectivity and network performance.
Achieving compliance with virtual infrastructure
Complementing physical infrastructure with virtual interconnection and virtual network services not only helps simplify how companies manage IT infrastructure and network connectivity in China; it also helps companies comply with country-specific regulations and requirements.
Equinix Fabric™ software-defined interconnection connects digital infrastructure and services on demand–to cloud service providers and NSPs, including the top three China NSPs, in the same Equinix IBX data center or another Equinix location. It’s a faster, more secure, private and redundant solution. Compared to the public internet, private interconnection delivers better performance and more stable connections. It also offers agility through an OPEX pricing structure that helps eliminate vendor lock-in. When you need to respond to or get ahead of market trends, use the Equinix Fabric Portal to power up or power down connections or point them to new locations.
Using Network Edge virtual network services to connect with a China NSP eliminates the need for additional networking hardware and allows for instant connectivity. You can remotely set up virtual network functions (VNF) devices using Network Edge via the Equinix Fabric Portal. Select your VNF devices from leading providers to connect your NSPs to the local China NSPs—virtually. Again, it’s OPEX instead of CAPEX for instant deployment and interconnection of network services.
Together, Equinix Fabric and Network Edge make it easy to set up the connections you need on Platform Equinix® for efficient and compliant business operations in China. Flexibility and speed are why the value of virtualization continues to increase today. We take out the cost of sourcing and selection; instead, we offer one-stop shopping from an intuitive dashboard. Equinix has the richest ecosystem of NSPs regionally and worldwide with 2,000+ providers. With major interconnection services available in Hong Kong, Tokyo, Singapore and Shanghai, you can easily deploy your digital infrastructure throughout the region and connect from any Equinix IBX location, as shown below.
What we’re seeing with customers is that they are accessing network functions virtualization (NFV) infrastructures via Equinix Fabric and Network Edge services to connect to China, which is consistent with what Frost & Sullivan recently reported:
“Enterprise customers in APAC are increasingly adopting digitalization, driven by the pandemic-induced social distancing needs. These customers are adopting a software-defined, automated, and virtualized infrastructure built on NFV. NSPs have partnered with multiple vendors that can help them design customized network architecture to suit enterprise needs. Be it for work-from-home solutions or agile networks, NFV is increasingly being adopted by network service providers (NSPs).”
How businesses are using virtual infrastructure
When businesses need to access data created in China, they can store the data in Equinix data centers in Shanghai or Hong Kong and then access it from any Equinix Fabric location. Taking this approach will ensure compliance with regulatory requirements such as the PIPL. As businesses expand locations to or from China or need to access a cloud service provider inside or outside of country, using Equinix Fabric and Network Edge services helps improve cross-border and offshore connectivity.
When one of the world’s largest manufacturers of vehicle components needed to extend its network reach between its regional branches in mainland China and other regional and branch offices, it deployed Cisco Managed Services on Network Edge to create bi-directional connectivity and support global WAN services. Equinix Fabric enabled proximity to its NSP and linked the core network between mainland China and the company’s MPLS.
A market research firm needed to establish connectivity between Tokyo and Shanghai and connect regional branch locations in Shanghai to access Microsoft Azure. Equinix Fabric enabled proximity to cloud regions with multi-services networking, such as SD-WAN, firewalls, cloud and internet access, all on a single platform. With Network Edge, they were able to establish connectivity via virtual routing and connect Microsoft Azure to branch connections in two locations.
Deploying software-defined interconnection and virtual networks at software speed is possible with Equinix Fabric and Network Edge. To learn more about how to engage and connect digital infrastructures across Greater China, read our Equinix Fabric Expansion in Greater China Solution Brief.
 Frost & Sullivan, APAC NFV-based Virtual Network Services Growth Opportunities, PC42-63, March 4, 2022.