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

BEIJING - 14 November 2017: Amazon.com Inc’s Chinese partner, Beijing Sinnet Technology Co., said it would purchase Amazon’s Chinese web services business for up to 2 billion yuan ($301 million), ending the U.S. firm’s cloud-computing business in the country.

Sinnet, which began operating the Amazon services in August 2016, said in a filing late on Monday the pending purchase would help the unit “comply with local laws and regulations and further improve service quality and security.” Amazon did not immediately respond to a request for comment on Tuesday morning.

Chinese regulators are tightening rules on foreign data and cloud services, including new surveillance measures and increased scrutiny of cross-border data transfers. In August Sinnet told customers it would begin shutting down VPNs and other services on its networks that allow users to circumvent China’s Great Firewall, citing direct instructions from the government.

The changes are linked to new national cyber laws that came into effect in 2017, which make network providers liable for content deemed dangerous or offensive to “socialist values”. In 2013 Amazon’s web services business signed agreements with provincial governments in China, and has previously worked with some of China’s largest tech firms including Xiaomi Inc, Qihoo 360 Technology Co Ltd and Kingsoft Corp Ltd.

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