Apple Inc. (AAPL) has started to store the personal data of Chinese users on servers in mainland China for the first time.

The Cupertino, Ca.-based company has added China Telecom to its list of data center providers, the Wall Street Journal reported Friday, citing a statement by China Telecom Corp. Ltd on the website of the local government of the city of Fuzhou. China Telecom is the country’s third-largest mobile network operator.

Apple said in a statement that the move was aimed at improving users’ experience of its iCloud service, in as much as locating the server closer to the users would allow faster response times.

But the development also comes against the background of recurrent rumors and reports of the Chinese authorities’ dissatisfaction at Apple’s unwillingness to store potentially confidential and sensitive information in a location under its jurisdiction.

In a statement, Apple dismissed suggestions that the move would compromise the security of users’ data, stressing that all information would be encrypted.

“Apple takes user security and privacy very seriously,” it said. “All data stored with our providers is encrypted. China Telecom does not have access to the content.”

A Reuters source said the encryption keys for Apple’s data on China Telecom servers would be stored offshore.

However, it is unclear whether Apple could refuse an official demand from Chinese authorities for information.

Apple’s actions contrast with those of Google Inc. (GOOG) and Microsoft Corp. (MSFT), both of whom have refused to cite servers on the Chinese mainland due to concerns over privacy and government censorship.

Reuters said news of the China Telecom deal emerged Thursday after a local government website in the south-eastern province of Fujian announced that iCloud had migrated to China Telecom’s servers after 15 months of rigorous testing and review. It also reported that the article is no longer available on the site.