Published: Tue, November 14, 2017
Finance | By Loren Pratt

Amazon's AWS business is reportedly pulling out of China

Amazon's AWS business is reportedly pulling out of China

Beijing Sinnet Technology said that it would buy a part of Amazon's cloud computing business in China for up to 2 billion Chinese yuan ($301 million) on November 14.

Amazon is committed to establish in China, and is looking forward for significant business opportunities and growth potential for the next few years. It is recommending new security measures and increasing observation of cross-border data transfers. In June of this year, new laws came into effect that now require all foreign businesses operating in China to store their user data locally and this has been a cause for concern among worldwide companies currently doing business in the region. If the company intends to continue functioning in China, it has to cooperate with local partners, that often have some degree of government oversight, an AWS spokesman explained. In China, regulations require Amazon to operate via a local partner before offering the services to customers.

Legal reasons appear to be the reason that Amazon is offloading the business.

On August Sinnet asked the customers to stop using virtual private networks (VPNs) that allow users to circumvent China's Great Firewall.

Amazon's decision casts a shadow over similar ventures in the country. In July, Apple dismissed VPN services from its app store in China.

Other legislation sees it work with Sinnet but also ChinaNetCenter, which provide the internet data centre and ISP services to deliver AWS's cloud.

Microsoft, Oracle and IBM did not immediately respond to request for comment on Tuesday.

In recent year, cloud services are becoming a crowded and major competitive domain in China.

However, the Chinese landscape is different, dominated mainly by local tech giants such as Alibaba and Tencent.

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