China cloud market turns to compliance & resilience

Forrester research indicates that China’s enterprise cloud market has transitioned into a mature, risk-aware phase focused on optimization, governance, and resilience. With 75% of decision-makers possessing over six years of public cloud experience, the sector is shifting away from basic infrastructure migration toward advanced modernization and artificial intelligence. This evolution is driven by a dominant hybrid cloud model and a stringent regulatory environment that prioritizes data sovereignty and operational continuity.

The Chinese cloud landscape is increasingly defined by a move toward hybrid strategies, with 92% of enterprise decision-makers now utilizing a combination of public and private environments. This architectural preference is motivated by the need to balance performance requirements with strict regulatory demands and the management of sensitive data. As organizations scale AI workloads, the hybrid model provides the necessary control over proprietary intellectual property and data. Furthermore, the market is moving beyond simple computing access to a disciplined stage where innovation is balanced against cost visibility, vendor dependency, and geopolitical concerns.

Compliance has evolved from a hurdle into a core design requirement, as frameworks such as the Personal Information Protection Law, the Data Security Law, and MLPS 2.0 directly influence technical decisions. This regulatory pressure is fueling demand for localized and sovereign cloud models that ensure sensitive workloads remain within controlled settings. Consequently, cloud providers are being selected based on their ability to integrate these legal requirements into their system designs. Approximately 74% of decision-makers are also actively addressing workload resilience through multi-cloud and hybrid approaches to mitigate concentration risks and ensure operational continuity.

Artificial intelligence, specifically generative and agentic AI, has become a primary differentiator for cloud service providers as platforms are increasingly used for model training and deployment. This shift has intensified competition among vendors to expand AI-related services and build robust developer ecosystems tailored to specific industry needs. Sectors such as financial services, automotive, and retail are seeking industry-specific cloud platforms that align with their unique operational processes and specialist regulations. According to Charlie Dai, VP and Principal Analyst at Forrester, organizations must now build AI-native architectures that align with regulatory realities to maintain a competitive advantage in this complex strategic phase.