Beijing Sinnet Technology Co. will buy servers and other unspecified "operational assets" in the country's capital from Amazon Web Services for as much as 2 billion yuan ($302 million), it said in a filing to the Shenzhen stock exchange. Thus, to comply with the Chinese law, it sold "certain physical infrastructure assets" to Sinnet, who has been operating the Amazon services since August 2016.
In a TechCrunch article it was explained that Chinese law does not allow certain technologies to be owned by non-Chinese companies, so a transaction was required to continue the partnership between the companies in China.
Amazon is committed to establish in China, and is looking forward for significant business opportunities and growth potential for the next few years.
Sinnet has told customers it has been told by the government to close VPNw which circumvent the Great Firewall.
"This move is mostly around regulatory compliance", said Charlie Dai, Beijing-based analyst at Forrester Research. In China, regulations require Amazon to operate via a local partner before offering the services to customers. AWS runs a separate hardware venture in collaboration with the Ningxia provincial government in China's northwest, according to Reuters.
Apple, Facebook and Google have all made similar choices, some which show they are essentially selling out to China, a country with a lack of freedoms when it comes to the internet, the natural foundation of these tech companies' operations and services.
More recently, telecoms equipment giant Huawei announced plans to take on AWS and Alibaba with its own cloud platform.
AWS launched in China back in 2013, partnering with both ChinaNetCenter and Sinnet at launch. Chinese firms account for roughly 80 percent of total cloud services revenue in China, and roughly half of the data centre market in 2017, according to Synergy Research Group.