So China is double-dipping? I was hoping that post-Snowden, this kind of request from some countries that companies need to store data locally, to make sure the data isn't taken by the US government, would encourage companies to encrypt the data end-to-end (client-side), before they get it into their clouds. Then nobody could complain about the data not being safe from the US government. It should be safe since even the company shouldn't have access to it.

I realize this isn't the real reason why China told Apple to build a datacenter there, but that's the one they used publicly, and as long as the company itself can get access to that data, then the argument is a pretty plausible one, even from China. Apple, Google and others could weaken this argument by adopting end-to-end encryption for their services.

Unfortunately, it seems the companies decided to keep the data as is, but build the data centers in Russia, China and wherever else they might ask them to do it.

Apple implemented not-exactly-end-to-end encryption on phones and the FBI publicly complained. Implementing effective encryption would most likely result in threats of a ban by the Chinese government. See http://www.wired.co.uk/news/archive/2013-07/11/blackberry-in...

Ultimately there's only so far you can go against the wishes of the Chinese government when your factories are there, or against the US government when your HQ is there.

Apple products are already banned for Gov usage.

http://www.reuters.com/article/2014/08/06/us-china-apple-idU...