To comply with Chinese legislation, however, Amazon sold certain physical infrastructure to its local partner.
Amazon said that it will sell few physical assets only and own the intellectual property of Amazon Web services (AWS) worldwide.
Amazon.com, Inc. (NASDAQ:AMZN) is selling some of its cloud business in China to its Chinese partner Beijing Sinnet Technology Co. for approximately 2 billion Yuan (U.S.$301.2 million).
Amazon is committed to establish in China, and is looking forward for significant business opportunities and growth potential for the next few years.
Amazon controlled more than 40 percent of the global market for public cloud services in 2016, well ahead of Microsoft Corp. and Alibaba, Gartner estimates.More news: N.Korean Soldier Flees Through Hail of Bullets
Charlie Dai, a Beijing-based analyst at Forrester Research, feels that the move was necessary for AWS to improve its other business areas in the market. If the company intends to continue functioning in China, it has to cooperate with local partners, that often have some degree of government oversight, an AWS spokesman explained.
Sinnet has told customers it has been told by the government to close VPNw which circumvent the Great Firewall.
Other tech giants from the USA faced hard situations in China. Laws that came into effect in June require firms to store data locally.
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. But the US company has to deal with lawsintroduced this year that mandate the storage of data within the country and bolster government control over the movement of information. Foreign firms there have long complained about local restrictions that appeared to favor domestic players.