AWS just sold some of its cloud computing infrastructure in China

Dianna Christensen
November 15, 2017

Beijing Sinnet Technology said Tuesday it would buy parts of Amazon's cloud business in China (AWS China) for up to 2 billion Chinese yuan ($301 million), but the US e-commerce giant said it was not exiting the world's second-largest economy.

Sinnet said in a regulatory filing on Monday that the purchase, which is still pending, would help it "comply with China's laws to further improve the company's AWS cloud services" in terms of quality and security.

"No, AWS did not sell its business in China and remains fully committed to ensuring Chinese customers continue to receive AWS's cloud services", Amazon told MyBroadband.

Amazon launched its web services business - better known as AWS - in China in 2014. It said instead it was selling hardware to comply with laws that forbid ownership or operation of certain types of cloud technology.

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Amazon Web Services (AWS) is selling some of its physical infrastructure in China to a local partner in order to comply with local laws, it has emerged. Apple, the American company behind the iPhone juggernaut, has said it will establish a data center in China, for instance. The service has outperformed its competitors throughout the world with a market share of over 40% globally in 2016, much more than Microsoft and Alibaba, according to Gartner. The sale is meant to comply with government regulations and improve service, it said.

China favors domestic firms over foreign ones with paternalistic policies.

All these tech giants face a tight regulatory environment in China, which could be the primary reason that AWS China is quickly toeing the line before any unpleasantness occurs. 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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