Beijing Sinnet Technology said that it would buy a part of Amazon’s cloud computing business in China for up to 2 billion Chinese yuan ($301 million) on November 14.
Amazon said that it will sell few physical assets only and own the intellectual property of Amazon Web services (AWS) worldwide.
In a regulatory filing on November 13, Sinnet outlined the purchase is still pending. Moreover, the deal would help to “comply with China’s laws to further improve the company’s AWS cloud services” based on quality and security.
The U.S. ecommerce giant signed a deal to allow Sonnet use AWS services in China in August 2016.
Commenting on its decision to sell the entire business, Amazon said, “No, AWS did not sell its business in China and remains fully committed to ensuring Chinese customers continue to receive AWS’s industry leading cloud services.”
The e-retailer added that it sold its physical assets of AWS to Sinnet in order to comply with the Chinese law. AWS contributes a major share in earnings of Amazon. It is also one of the major reasons for company’s shares being up over 50 percent from beginning of 2017 to now.
They would go under the strict regulatory scrutiny from the Chinese government. Sinnet urged its customers to avoid using virtual private networks (VPNs), which outsmart China’s Great Firewall.
Other tech giants from the U.S. faced difficult situations in China. Apple eliminated VPNs from its app store in July 2017, as Chinese government restricted the use of such services.
Amazon is committed to establish in China, and is looking forward for significant business opportunities and growth potential for the next few years.