Amazon selling web services unit in China

Tuesday, 14 Nov, 2017

That statement says "Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services".

Financial newswires report that AWS' local partner, Beijing Sinnet, has acquired Amazon's local operations for about US$300m, with news of the deal appearing as a filing on the Shenzen Stock Exchange on Monday.

Cloud services have become a crowded and competitive field in China in recent years, with Alibaba Group Holding Ltd's cloud unit opening over a dozen overseas data centres since 2016.

The deal could be linked to increasing regulatory scrutiny from the Chinese government who is trying to tighten their grip on the internet in the country.

"This move is mostly around regulatory compliance", said Charlie Dai, Beijing-based analyst at Forrester Research.

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.

The move casts a shadow over similar foreign ventures in the country.

Microsoft, Apple, Oracle and IBM also face challenges in localising their data storage units in China because of new laws coming into effect.

TechCrunch contacted Amazon for comment but did no hear back at the time of writing.

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.

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