AWS Announces New China Region, but AWS Isn’t the Provider

Amazon Web Services announced the launch of a second cloud availability region in China, but AWS has very little to do with actually providing cloud services hosted in the region.

It’s always been difficult for foreign companies to provide any kind of internet-related infrastructure services in China, be they cloud or data center colocation. They would typically have to find local partners who would provide the services on their behalf.

But the regulations have been tightening, forcing foreign companies to give up more and more control over their services in the country. AWS recently sold the equipment that powers its first Chinese availability region to Beijing Sinnet, its Chinese partner that operates the region, saying it was necessary to remain compliant.

“Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services,” AWS said in a statement issued in November, when it announced the asset sale.

The new AWS cloud region, hosted in data centers in Ningxia, an autonomous region in north-central China, is operated by Ningxia Western Cloud Data Technology, a three-year-old data center and cloud service provider.

Both the Ningxia and the Beijing regions are isolated from the global AWS network, and customers that host their applications and data in the regions sign contracts with the two Chinese providers, not with AWS. There is a separate, Chinese website for provisioning AWS services in the two regions.

From Tuesday’s announcement by AWS:

Analysts expect an explosion in the Chinese public cloud market over the next few years. The Wall Street Journal recently cited an estimate by Morgan Stanley that it will go from $2 billion today to $16 billion by 2020, and while Chinese cloud giants Alibaba and Tencent are expanding their international data center infrastructure on their own terms, foreign companies wanting to take advantage of the market growth in China are forced to play by the Chinese government’s extremely protectionist rules.

A recent move to tighten those rules even further elicited a response from US lawmakers, about 50 of whom signed a letter earlier this year to the Chinese ambassador in Washington raising concerns over a Beijing proposal to require cloud providers to hand ownership and operations of their infrastructure in China to their Chinese partners.

Chinese data center provider 21Vianet operates Microsoft’s and IBM’s cloud platforms in China, while a Google spokesperson told CNBC earlier this year that there were “no plans to bring Google Cloud to China.”