"Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services".
"AWS did not sell its business in China and remains fully committed, " the company said in an emailed statement.
But Amazon said that it is only selling "certain physical assets" and still owns the intellectual property for AWS worldwide. Amazon has not yet provided the reason behind this exit, but it may be due to the tightening rules on foreign data and cloud services by Chinese regulators.
Beijing Sinnet Technology Co Ltd, Amazon's China partner, said in a filing late yesterday that it would buy the U.S. firm's Amazon Web Services (AWS) public cloud computing unit in China for up to 2 billion yuan ($301.2 million), according to the report.
Amazon launched its web services business - better known as AWS - in China in 2014. AWS runs a separate hardware venture in collaboration with the Ningxia provincial government in China's northwest, according to Reuters. Laws that came into effect in June require firms to store data locally.
Sinnet has told customers it has been told by the government to close VPNw which circumvent the Great Firewall.
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. Companies targeted by the regulations are required to carry out a security self-assessment or obtain approval from the relevant regulator before transferring the controlled data overseas.
Amazon controlled over 40 per cent of the global market for public cloud services in 2016, well ahead of Microsoft Corp and Alibaba, according to Gartner estimates.
Other legislation sees it work with Sinnet but also ChinaNetCenter, which provide the internet data centre and ISP services to deliver AWS's cloud.