Amazon surrenders cheapest bit of Chinese cloud

UK-lawmakers-say-Amazon

Amazon Web Services (AWS) has sold some of its Chinese cloud assets in a bid to comply with increasingly strict regulations in the country.

Sinnet Technology Co.in Beijing, which is the Chinese partner of Amazon, said in a Monday filing that it would purchase the USA company's Amazon Web Services public cloud computing business in China at a price of as much as 2 billion yuan or $301.3 million.

In a statement Amazon emphasised that it had not sold its business in China, saying that it "remains fully committed to ensuring Chinese customers continue to receive AWS's industry leading cloud services".

Amazon Web Services confirmed in a statement reported by WSJ that this move was meant to meet compliance requirements in China. As a result, in order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet, its longtime Chinese partner and AWS seller-of-record for its AWS China (Beijing) region.

The deal between Amazon and Sinnet is possibly connected with what is called the Great Firewall of China, the government's increasingly vice-like grip over Internet access in the country.

One analyst based in Beijing said that the move by Amazon was mostly due to regulatory compliance.




"Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services", the USA firm said. AWS runs a separate hardware venture in collaboration with the Ningxia provincial government in China's northwest, according to Reuters. In China, regulations require Amazon to operate via a local partner before offering the services to customers.

With Alibaba's cloud services expanding rapidly, it looks as if China is resolved to sit on its own cloud.

Other tech giants from the USA faced hard situations in China.

China favors domestic firms over foreign ones with paternalistic policies.

Amazon shares acquired 50 cents to $1,129.67 mid-morning Tuesday.

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