Amazon Sells Portion Of Business For $300 Million Because Of Chinese Law

Amazon to sell China cloud services unit in $300 million deal

In a statement to TechCrunch, the online retail giant said it is not parting ways with its business in China, and will continue to offer the industry-leading cloud services to its customers in China. "We're excited about the significant business we have in China and its growth potential".

AWS admitted it's selling "certain physical infrastructure assets" to Sinnet, its seller-of-record in the country, as it denied reports that it was pulling out of China.

Amazon signed a deal in August 2016 to allow Chinese partner Sinnet operate the Amazon services provided by Amazon Web Services (AWS) in China.

The U.S. company has agreed to sell its China-based web services business to Beijing Sinnet, the local partner that operates it, according to a filing on the Shenzhen Stock Exchange that was noted by The Wall Street Journal and Reuters.

According to Synergy, 80% of China cloud services are provided by China companies and about 50% of China based data centres are owned by China-based organisations.

China has tightened up its tech regulation recently: for example, a new Chinese cybersecurity law came into force on June this year.

AWS has a separate hardware venture in partnership with the Ningxia provincial government in China's northwest.

In recent year, cloud services are becoming a crowded and major competitive domain in China. Sinnet urged its customers to avoid using virtual private networks (VPNs), which outsmart China's Great Firewall.

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

Due to increased regulations surrounding online data in China, Amazon has announced that it will sell off the hardware now powering its public cloud business in the country.



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