One month after denying it will exit China, AWS opens its second...

One month after denying it will exit China, AWS opens its second region there

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Amazon Web Services has opened its second region in China with a local partner, Ningxia Western Cloud Data Technology. The launch comes just one month after Amazon denied reports that AWS is leaving China, but said the company sold “certain physical infrastructure assets” to Internet services company Beijing Sinnet, which operates its first region in the country, in order to comply with regulations.

As Amazon explained to TechCrunch at the time, “Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services,” which meant it had to sell those assets to Sinnet even though it continues to own all intellectual property for AWS around the world.

AWS’s second China region will be based in Ningxia. An AWS region is a geographical area with its own availability zones, which is how AWS refers to technology infrastructure in locations set far apart from each other to protect customers from failures. Though it is only AWS’s second region in China, the Ningxia region represents the seventh one in the Asia Pacific (the others are Beijing, Mumbai, Seoul, Singapore, Sydney and Tokyo) and its 17th region in the world.

Like other foreign tech companies, Amazon must adhere to increasingly strict government regulations in order to stay in China, where it began operations in 2014. These include a new set of cybersecurity laws that took effect in June, ostensibly to combat cyberterrorism and hacking. In practice, however, the new laws mean China’s central government now has more direct control over the operations of Internet companies. For example, it requires data localization for “critical information infrastructure operators.” While the definition of “infrastructure operators” is vague, it means many tech companies must now store data within China’s borders.

In its press release, Amazon said even though AWS offers the same cloud services in China as in other areas, the AWS China regions “are isolated from all other AWS regions and operated by AWS’s Chinese partners separately from all other AWS regions.” This also means that the users of AWS’ China regions enter into customer agreements with Sinnet or NWCD, instead of AWS, in order to comply with government regulations.

In what can be seen as a sign of how closely tech companies must work with the Chinese government, Amazon’s announcement contained a statement from a Communist Party official. He Jian, Secretary of Zhongwei Municipal Committee, said “We have developed a close collaboration with AWS based on mutual trust, and are delighted that our region is now offering highly resilient, high performance data centers to enterprises across the nation. We have already seen a rapid growth in the cloud computing industry, and with the unique resources of Ningxia combined with the mature expertise of AWS Cloud, we will set a great example for economic transformation in the west of China.”

In the same release, AWS CEO Andy Jassy said “Together with our partner NWCD, and with deep appreciation of the support we’ve received from the Zhongwei municipal government and Ningxia government, we’re excited to announce the launch of the AWS China (Ningxia) region, operated by NWCD. The second AWS region in China is part of AWS’s ongoing commitment to offer best-in-class cloud technologies to Chinese customers.”

AWS’ main rivals in China include Alibaba’s cloud computing business, called Aliyun, which is growing quickly thanks to aggressive investments by the e-commerce giant.

Featured Image: Bloomberg/Getty Images



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