Amazon Sells Cloud Assets in China Due to New Rules

Amazon Sells Cloud Assets in China Due to New Rules

Amazon Sells Cloud Assets in China Due to New Rules

Amazon's Chinese partner, Beijing Sinnet Technology Co, said it would purchase Amazon's Chinese web services assets for up to 2 billion yuan (A$394 million) to comply with Chinese regulations. "As a result, in order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet".

An AWS spokesperson said in a subsequent statement: "No, AWS did not sell its business in China and remains fully committed to ensuring Chinese customers continue to receive AWS's industry leading cloud services".

Amazon has made it clear that it is selling only "certain physical assets", and retains the ownership of intellectual property for AWS (Amazon Web Services) worldwide.

Amazon Web Services confirmed in a statement reported by WSJ that this move was meant to meet compliance requirements in China.

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

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AWS has another hardware venture with the provincial government in Ningxia located in the northwest region of China. Apple, the American company behind the iPhone juggernaut, has said it will establish a data center in China, for instance. Microsoft has its Azure cloud services operating in partnership with 21Vianet Group, which is based in China. 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.

Amazon's decision casts a shadow over similar ventures in the country.

Foreign firms in China have long complained about local restrictions that appeared to favour domestic players. "The Chinese government is blatantly flaunting the rules of trade, including but not limited to their completely unreasonable rules on cloud computing".

Big name tech companies in the USA often bend over backward to either attempt to penetrate the highly protected Chinese market, or maintain a somewhat established presence.

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