AWS sells China assets to local cloud partner

AWS logo on black background
(Image credit: AWS)

Amazon Web Services (AWS) is selling some of its physical infrastructure in China to a local partner in order to comply with local laws, it has emerged.

AWS admitted it's selling "certain physical infrastructure assets" to Sinnet, its seller-of-record in the country, as it denied reports that it was pulling out of China.

Both the Wall Street Journal and Reuters had reported that the China partner had notified investors that it was about to buy AWS's China business for 2 billion yuan ($301.2 million).

An AWS spokesperson said in a subsequent statement: "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.

"Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services. As a result, in order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet, its longtime Chinese partner and AWS seller-of-record for its AWS China (Beijing) Region.

"AWS continues to own the intellectual property for AWS Services worldwide. We're excited about the significant business we have in China and its growth potential over the next number of years."

Sinnet owns eight data centres with more than 40,000 racks, according to its listing on AWS's partner directory.

AWS first launched a China service in 2014, but must operate via local partners to comply with Chinese law, with companies required to store data locally in legislation enacted in June.

Other legislation sees it work with Sinnet but also ChinaNetCenter, which provide the internet data centre and ISP services to deliver AWS's cloud.

AWS faces stiff competition in the region from native cloud giant Alibaba, among other rivals.