AWS just sold some of its cloud computing infrastructure in China

15 November, 2017, 01:21 | Author: Lester Mason
  • Amazon to sell China cloud services unit in $300 million deal

Beijing Sinnet Technology said Tuesday it would buy parts of Amazon's (NASDAQ: AMZN) cloud business in China for up to two billion Chinese yuan ($301 million U.S.), but the USA e-commerce giant said it was not exiting the world's second-largest economy.

"In order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet", an AWS spokesman said today, adding AWS would still own the intellectual property for its services worldwide.

It follows a prior arrangement with Sinnet, struck in 2016, which allowed the Chinese firm to operate Amazon Web Services (AWS) products in China.

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Amazon isn't the only one to make decisions based off a desire to stay in China. AWS runs a separate hardware venture in collaboration with the Ningxia provincial government in China's northwest, according to Reuters. But the US company has to deal with lawsintroduced this year that mandate the storage of data within the country and bolster government control over the movement of information. Microsoft already operates its Azure cloud service in China with the China-based company 21Vianet Group.

Beijing Sinnet Technology Co. told the Wall Street Journal that the asset acquisition was an attempt to "comply with our country's laws and rules and further improve the security and the service quality of the AWS cloud-computing service operated by the company".

The move places a big shadow over foreign ventures of a similar nature in China. Foreign firms have repeatedly complained about the biased regulations in China that favor the local companies. But like its peers, the company has had trouble making headway in China, which is dominated by local tech giants Alibaba and Tencent Holdings Ltd. Besides cloud services, Beijing is also tightening its grip on online expression, cracking down on virtual private networks often used to dodge internet restrictions and strictly regulating writings on platforms such as blogs.

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