Published: Tue, November 14, 2017
Money | By Armando Alvarado

Amazon Spins off Cloud Business to Chinese Firm

Amazon Spins off Cloud Business to Chinese Firm

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 on its website that its public cloud services in the country are exclusively managed by Sinnet.

The company explained: "Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services".

Beijing Sinnet Technology Co. said Tuesday it would purchase parts of Amazon's Chinese web services business for up to 2 billion Yuan ($301 million).

"AWS continues to own the intellectual property for AWS Services worldwide".

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

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Beijing Sinnet Technology, Amazon's partner in China, told customers months ago to stop using illegal virtual private networks (VPNs), which can offer secure, private networks for users, but also circumvent internet censorship in the country.

China has tightened up its tech regulation recently: for example, a new Chinese cybersecurity law came into force on June this year. Some U.S. -based trade groups say that China has repeatedly lent deaf ears to the requests by U.S. firms on giving access to Chinese markets just like the Chinese firms get in the U.S. However, the Trump administration has hardly done anything to address the issue.

Amazon controlled over 40 per cent of the global market for public cloud services in 2016, well ahead of Microsoft Corp and Alibaba, according to Gartner estimates. Companies targeted by the regulations are required to carry out a security self-assessment or obtain approval from the relevant regulator before transferring the controlled data overseas.

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

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