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Amazon surrenders cheapest bit of Chinese cloud

15 November, 2017, 01:24 | Author: Melinda Barton
  • Amazon to sell China cloud services unit in $300 million deal

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. "As a result, in order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet".

Commenting on its decision to sell the entire business, Amazon said, "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". It said instead it was selling hardware to comply with laws that forbid ownership or operation of certain types of cloud technology.

Earlier this year Apple transferred data to China-based companies.

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.


Amazon controlled more than 40 percent of the global market for public cloud services in 2016, well ahead of Microsoft Corp. and Alibaba, Gartner estimates.

The move places a big shadow over foreign ventures of a similar nature in China.

AWS first launched a China service in 2014, but must operate via local partners to comply with Chinese law, with companies required to store data locally in legislation enacted in June.

China favors domestic firms over foreign ones with paternalistic policies. Some U.S. -based trade groups say that China has repeatedly lent deaf ears to the requests by U.S. firms on giving access to Chinese markets just like the Chinese firms get in the U.S. However, the Trump administration has hardly done anything to address the issue. "The Chinese government is blatantly flaunting the rules of trade, including but not limited to their completely unreasonable rules on cloud computing".

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