AWS Sells Chinese Cloud Assets Amid Tightening Regulations

Is all that other stuff you are doing really important?. If it's not frankly stop doing it. Image ALotOfPeople Getty Images  iStock

Moreover, the deal would help to "comply with China's laws to further improve the company's AWS cloud services" based on quality and security.

In 2013 Amazon's web services business signed agreements with provincial governments in China, and has previously worked with some of China's largest tech firms including Xiaomi, Qihoo and Kingsoft.

"AWS did not sell its business in China and remains fully committed, " the company said in an emailed statement.

Beijing Sinnet Technology, Amazon's China partner, said in a filing late on Monday that it would buy the USA firm's Amazon Web Services (AWS) public cloud computing unit in China for up to 2 billion yuan ($301.2 million).

To comply with Chinese legislation, however, Amazon sold certain physical infrastructure to its local partner.

Regulators in China have tightened rules on cloud services and foreign data, implementing new measures of surveillance and increasing the scrutiny of data transfer that cross borders.

Laws that took effect during June require companies to store their data locally.

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

Amazon's cloud business in China already faced tougher rules due to China's tight internet controls.

Sinnet told its customers in August it would be shutting down its VPNs and other network services that allowed its users to circumvent the "Great Firewall System" of China that controls censorship, citing the government's direct instructions.

The move casts a shadow over similar foreign ventures in the country. Oracle, Microsoft and IBM also face hard new regulatory challenging for localizing their own data storage units.

Amazon and other USA companies, including Apple Inc., have faced pressure in China to comply with the government's desire to further tighten the screws on its already heavily policed internet.

Chinese cloud services are crowded and competitive with Alibaba Group cloud unit opening over a dozen overseas data centres since 2016.

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