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China is most probably doing that to protect local companies that are involved in the cloud computing.
Countries have been known to try to help local companies that are engaged in certain services by prohibiting foreign companies that are engaged in those same services from operating locally.
This is done to allow the local companies to be the only ones offering the service which would allow them to grow without facing foreign competition.
Other ways countries do this include:
In conclusion, China was most likely protecting companies in China that offer cloud computing from competition from U.S. companies which offer the same thing.
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