No, AWS Isn’t Exiting China

AWS exiting China? Not quite. Amazon Web Services, while denying reports that it is withdrawing its business in the country, has admitted that it has been forced to sell some physical assets.

To its local partner.

Confusion arose when both The Wall Street Journal and Reuters reported that Beijing Sinnet, the partner that operates the Chinese arm of the cloud giant, had notified investors of its acquisition of the business for 2 billion yuan.

Some $301 million.

However, it appears that Amazon sold local operations in order to comply with local law — instead of an outright sale, as was the impression most got when news of the deal appeared as a filing on the Shenzhen Stock Exchange on Monday.

Long story short, AWS quickly clarified that it remains keenly interested in making its services available in China. It was just that Chinese law forbade foreign companies from owning or operating certain technology for the provision of cloud services.

In order to comply, Amazon Web Services sold certain physical infrastructure assets to Sinnet, the company responsible for selling and maintaining its cloud in the AWS China (Beijing) region.

In fact, the statement Sinnet released to the markets reportedly said that the purchase was meant to help comply with the laws in place in the country, and further improve the security and service quality of the AWS cloud service that it operated.

Well, if the shoe fits!

This move seems to be dictated by the drive that is seeing China showing a keen interest in fostering its own technology industries in order to make them the premier choice for locals.

A drive that has resulted in companies like Alibaba and Tencent make massive cloud gain, while even Huawei and Lenovo showing cloudy ambitions.

As for Amazon, this is not the first time Chinese law has impacted AWS, but the company is staying put.