Amazon Spins off Cloud Business to Chinese Firm

Tammy Harvey
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 USA e-commerce giant said it was not exiting the world's second-largest economy.

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

Amazon Web Services confirmed in a statement reported by WSJ that this move was meant to meet compliance requirements in China. is selling its hardware from its China based public cloud business amidst the tightening of regulations over data online that has created a big roadblock for tech firms that operate in the second largest economy in the world.

Amazon isn't the only one to make decisions based off a desire to stay in China.

In a TechCrunch article it was explained that Chinese law does not allow certain technologies to be owned by non-Chinese companies, so a transaction was required to continue the partnership between the companies in China.

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. Apple, the American company behind the iPhone juggernaut, has said it will establish a data center in China, for instance.

Beijing Sinnet Technology Co. told the Wall Street Journal that the asset acquisition was an attempt to "comply with our country's laws and rules and further improve the security and the service quality of the AWS cloud-computing service operated by the company". The rule makes it hard to use data globally, greatly complicating operational strategies for many overseas companies, and countries including the US have voiced concerns about the legislation's enforcement.

They would go under the strict regulatory scrutiny from the Chinese government.

Other reports by Ligue1talk

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