Amazon is selling its Cloud Services Business in China For up to $301 million

Beijing Sinnet Technology Co. said Tuesday it would purchase parts of Amazon’s Chinese web services business for up to 2 billion Yuan ($301 million).

Amazon signed a deal in August 2016 to allow Chinese partner Sinnet operate the Amazon services provided by Amazon Web Services (AWS) in China. The AWS had worked with Beijing’s and Ningxia’s government and companies that covers consumer names like software maker Kingsoft, Xiaomi, and security firm Qihoo.

Sinnet said that the ongoing purchase would help the unit follow the local laws and regulations and make improvements in quality and security of the service. Amazon confirmed that it will sell a certain physical property and it still owns the intellectual property for AWS worldwide.

Chinese regulators are strengthening the rules on foreign data and cloud services. It is recommending new security measures and increasing observation of cross-border data transfers.

Amazon said in a statement, “AWS continues to own the intellectual property of AWS Services worldwide. ‎We’re excited about the significant business we have in China and its growth potential over the next number of years”

On August Sinnet asked the customers to stop using virtual private networks (VPNs) that allow users to circumvent China’s Great Firewall.

Other U.S. companies such as Apple has also responded to the government’s similar demands.  In July, Apple dismissed VPN services from its app store in China.

In recent year, cloud services are becoming a crowded and major competitive domain in China.