I am not expert in China legislation, but Cloudflare has local Chinese version for China market and from what I heard it obeys blacklist policies

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I think it's a different attitude and scope.

China wants to ensure that inside China Chinese rules apply.

While the European Union fancies itself the regulator of the entire world.

Not to say I agree with what China does either.

But how does DSA/GDPR whatever else EU regulation differs in that case? They cover only interactions with EU citizens, isn't?

Okay I can see Cloudflare mention "regulatory challenges" themselves here https://blog.cloudflare.com/how-we-extended-cloudflares-performance-and-security-into-mainland-china/

> n the case of China, any organization that wishes to operate a website inside of the country needs an Internet content provider (ICP) license from the Chinese Ministry of Industry and Information Technology (MIIT). We investigated whether it would be possible for CloudFlare to obtain an ICP license to cover all our customers, but determined that licenses needed to be issued on a per-site basis. This introduced an enormous amount of regulatory complexity.