Inc. (AMZN) has opened a second cloud computing data-center complex in China in partnership with local firm, Ningxia Western Cloud Data Technology Co Ltd. (NWCD).

In a press release, Amazon’s cloud computing business, Amazon Web Services (AWS), confirmed that the new center in the northwestern Chinese region of Ningxia enables it to provide services to a population of about 6.3 million. Due to strict regulations, the center will be operated by NWCD.

“We’re excited to announce the launch of the AWS China (Ningxia) region, operated by NWCD,” Andy Jassy, CEO of AWS said in a statement. “The second AWS Region in China is part of AWS’s ongoing commitment to offer best-in-class cloud technologies to Chinese customers. For years, AWS and our partners have had an enthusiastic base of customers in China, a country with one of the world’s largest and most dynamic cloud ecosystems.”

Overcoming Regulatory Hurdles

News of AWS’s expansion in the increasingly crowded Chinese cloud computing market came a month after it sold the hardware assets of its Beijing-registered cloud unit for up to 2 billion yuan ($302.06 million). Amazon denied reports that the move was part of a strategy to exit China, adding that it was forced to sell “certain physical infrastructure assets” to internet services company Beijing Sinnet in order to comply with strict regulations.

In June, China introduced new regulations that favor local cloud firms over foreign ones. Under the rules, overseas companies, including the likes of Amazon, Apple Inc. (AAPL) and Microsoft Corp. (MSFT), must now store data locally and outsource hardware elements to local partners. (See also: Amazon Cloud Business May Be Slowing: Keybanc.)

Chinese firms, such as Alibaba Group Holding Ltd. (BABA), have capitalized on these changes by opening dozens of new data centers. Synergy Research Group reports that Chinese companies now account for roughly 80 percent of total cloud services revenue in the country, according to Reuters.

An Amazon spokesperson told Reuters that the new data center in Ningxia was built by its NWCD partners using specifications provided by AWS. The company added that it is not able to enter into agreements with customers and instead must leave this responsibility to local partners NWCD and Beijing Sinnet. (See also: Amazon's Cloud Service Just Got Cheaper.)

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