Amazon sells off China cloud assets as tough new rules bite

Amazon sells off China cloud assets as tough new rules bite

Amazon sells off China cloud assets as tough new rules bite

In a statement to TechCrunch, the online retail giant said it is not parting ways with its business in China, and will continue to offer the industry-leading cloud services to its customers in China.

Amazon is committed to establish in China, and is looking forward for significant business opportunities and growth potential for the next few years.

Amazon said that it will sell few physical assets only and own the intellectual property of Amazon Web services (AWS) worldwide.

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"In order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet".

Both the Wall Street Journal and Reuters had reported that the China partner had notified investors that it was about to buy AWS's China business for 2 billion yuan ($301.2 million). 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 global companies currently doing business in the region.

Charlie Dai, a Beijing-based analyst at Forrester Research, feels that the move was necessary for AWS to improve its other business areas in the market.

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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.

Cloud services have become a crowded and competitive field in China in recent years, with Alibaba Group Holding Ltd's cloud unit opening over a dozen overseas data centers since 2016. Foreign firms have repeatedly complained about the biased regulations in China that favor the local companies.

China is in the process of strengthening its censorship apparatus - commonly known as the Great Firewall of China - and companies like Amazon appear to be furthering Beijing's ambitions in order to maintain a place in the local market.

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On Monday, Amazon shares closed up 0.34% at $1,129.17.

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