New cybersecurity laws introduced in China make it harder for global companies to store data pertaining to Chinese nationals. And although cloud providers have set up data centres in countries that require citizen data to remain onshore, Amazon and other providers are taking steps to sell their hardware assets to Chinese companies.
Slate speculates that a government may want to ensure data stays onshore so their ability to intercept or interrogate data is enhanced. And with networks such as Amazon's often moving data around other territories in order to ensure it is always available, governments might be concerned that data lands in less secure locations where legal protections for their citizens are weaker or where protections are stronger and a government cannot access data stored overseas.
In both scenarios, what we see is a loss of control by central governments that are increasingly turning to online tools to support law enforcement or impinge of personal privacy (depending on your point of view).
Amazon's move is not completely unexpected but as countries seek to secure their borders, it's not surprising that the global nature and openness of the internet is seen as a threat to government control. While Australian laws are not so strict, when I speak to people in government about the cloud, they often talk about the uncertain regulatory nature of the internet and how they are concerned about "security'.
But I think they are really talking about "control".