Amazon sells part of Chinese cloud computing business

Amazon to sell China cloud services unit in $300 million deal

Amazon has disputed a report from Reuters that it sold its web services unit in China to Beijing Sinnet Technology.

"In order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet", an AWS spokesman said on Tuesday, adding AWS would still own the intellectual property for its services worldwide.

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

The deal could be linked to increasing regulatory scrutiny from the Chinese government who is trying to tighten their grip on the internet in the country.

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. AWS is significantly ahead of the competition across the world, but in China it must operate via local partners due to regulation.

"AWS sold certain physical infrastructure assets to Sinnet", it said.

AWS has a separate hardware venture in partnership with the Ningxia provincial government in China's northwest.

Big name tech companies in the US often bend over backward to either attempt to penetrate the highly protected Chinese market, or maintain a somewhat established presence.

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

Apple, Facebook and Google have all made similar choices, some which show they are essentially selling out to China, a country with a lack of freedoms when it comes to the internet, the natural foundation of these tech companies' operations and services.

With Alibaba's cloud services expanding rapidly, it looks as if China is resolved to sit on its own cloud.

Microsoft, Oracle and IBM are likely to follow suit.

Sinnet owns eight data centres with more than 40,000 racks, according to its listing on AWS's partner directory.

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