Amazon sells AWS cloud assets in China amid tightening regulation

Mae Love
November 14, 2017

Both the Wall Street Journal and Reuters had reported that the China partner had notified investors that it was about to buy AWS's China business for 2 billion yuan ($301.2 million). That statement says "Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services".

"In order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet", a spokesman for the Amazon.com cloud-services unit said on November 14, adding AWS would still own the intellectual property for its services worldwide. The company signed a deal with Sinnet back in September 2016.

It looks like Amazon is removing itself from the Chinese cloud services industry on account of stringent new data laws that went live in the country earlier this year. "‎We're excited about the significant business we have in China and its growth potential over the next number of years".

Legal reasons appear to be the reason that Amazon is offloading the business.

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In August Sinnet told customers it would begin shutting down VPNs and other services on its networks that allow users to circumvent China's Great Firewall, citing direct instructions from the government. It would also "further improve service quality and security".

Amazon was a late entrant to the Chinese cloud market which is dominated by local players like AliCloud and China Telecom.

AWS also has a separate hardware venture in China and is partnered with the Ningxia provincial government in the north-west part of the country though all of Amazon's public cloud services are managed exclusively by Sinnet.

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