Amazon sells parts of cloud business found in China for $301 million

Beijing Sinnet Technology explained Tuesday it could buy elements of Amazon’s cloud business in China for up to 2 billion Chinese yuan ($301 million), but the U.S. e-commerce giant said it had been certainly not exiting the world’s second-largest economy.

In August 2016, Amazon signed a deal to let Chinese tech strong Sinnet operate services provided by Amazon Web Offerings (AWS) in China.

Sinnet said in a good regulatory filing on Monday that the purchase, which continues to be pending, would help it “adhere to China’s laws to help expand improve the company’s AWS cloud products and services” with regards to quality and security.

But Amazon said that it is only selling “certain physical assets” and still owns the intellectual house for AWS worldwide.

“No, AWS did not sell its business in China and remains fully focused on ensuring Chinese buyers continue to receive AWS’s sector leading cloud products and services. Chinese legislation forbids non-Chinese businesses from owning or functioning selected technology for the provision of cloud products and services. As a result, in order to adhere to Chinese legislation, AWS sold selected physical infrastructure assets to Sinnet, its longtime Chinese spouse and AWS seller-of-record for its AWS China (Beijing) Area,” Amazon explained in a declaration to TechCrunch.

“AWS continues to possess the intellectual house for AWS Services all over the world. ‎We’re worked up about the significant business we’ve in China and its growth potential over the next period of time.”

The deal could be linked to increasing regulatory scrutiny from the Chinese government who’s trying to tighten their grip on the web in the united states. Sinnet asked its buyers earlier this year to avoid using virtual private systems (VPNs), which have the ability to circumvent China’s Great Firewall.

Other U.S. firms also have faced a challenging situation in China. In July, Apple taken away VPNs from its iphone app shop in China, amid the crackdown on such products and services by the government.

AWS has been a jewel in the crown for Amazon’s earnings in recent times and a good big reason why the company’s shares are up more than 50 percent year-to-date.

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