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Amazon's AWS business is reportedly pulling out of China
15 November 2017, 01:21 | Melanie Burgess
Is all that other stuff you are doing really important?. If it's not frankly stop doing it. Image ALotOfPeople Getty Images iStock
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). "As a result, in order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet, its longtime Chinese partner".
A spokesperson for AWS said Tuesday that to comply with the laws in China, AWS sold some physical infrastructure assets to its partner Sinnet, adding that AWS would remain the owner of intellectual property for its worldwide services.
"We're excited about the significant business we have in China and its growth potential".
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.
"Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services", the USA firm said.
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It follows a prior arrangement with Sinnet, struck in 2016, which allowed the Chinese firm to operate Amazon Web Services (AWS) products in China.
The deal between Amazon and Sinnet is possibly connected with what is called the Great Firewall of China, the government's increasingly vice-like grip over Internet access in the country.
Whereas the European Union sees foreign cloud services as a source of revenue - fining them billions whenever they can think up some legal infraction they may have committed - China is obliging foreign cloud service providers to sell their assets to China-based companies which come under state control.
The move places a big shadow over foreign ventures of a similar nature in China. But like its peers, the company has had trouble making headway in China, which is dominated by local tech giants Alibaba and Tencent Holdings Ltd.
China favors domestic firms over foreign ones with paternalistic policies.
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