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Beijing Sinnet Technology Co. to buy Amazon’s Chinese web services business

Beijing Sinnet Technology Co., Amazon.com Inc’s Chinese partner has revealed that it would purchase Amazon’s Chinese web services business for up to 2 billion yuan ($301 million), which will end the Amazon’s cloud-computing business in China.

In a statement AWS spokesman revealed that, “In order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet.” Also, he said that AWS would still own the intellectual property for its services worldwide. He added, “‎We’re excited about the significant business we have in China and its growth potential.”

The reason behind this is the Chinese regulators tightening the rules on foreign data and cloud services, implementing new surveillance measures and increasing scrutiny of cross-border data transfers. Laws that came into effect in June require firms to store data locally.

On the other, AWS has a separate hardware venture in partnership with the Ningxia provincial government in China’s northwest. Amazon said in a statement that its website that its public cloud services in the country are exclusively managed by Sinnet.

Amazon’s cloud business in China has faced much tougher rules due to China’s tight internet controls. In August, Sinnet has announced that it would shut down VPNs and other services on its networks that allow users to circumvent China’s so-called Great Firewall system of censorship, citing direct instructions from the government.

Cloud services have become a crowded and challenging field in China in recent years, with Alibaba Group Holding Ltd’s cloud unit opening over a dozen overseas data centers since 2016.