China pilots foreign equity limit removal in value-added telecom services to expand opening-up

The Ministry of Industry and Information Technology (MIIT) on Wednesday announced a pilot project to remove foreign ownership restrictions on some domestic value-added telecom services in four regions of China - Beijing, Shanghai, Hainan and Shenzhen - showing the country's determination to expand opening-up on all fronts.

A circular released by the MIIT noted that the value-added telecom services will include internet data centers, content delivery networks and internet service providers, among others, marking the latest endeavor to promote high-quality opening-up and accelerate the process of new industrialization.

China will provide equal treatment to foreign entities approved for the pilot programs, eliminating the 50 percent foreign ownership limit in these critical sectors, and it will no longer impose ownership ratio restrictions, the MIIT confirmed.

China is progressively opening its doors, with the action highlighting the country's confidence and determination in further opening-up amid global protectionism. These moves are expected to boost the vitality of the Chinese market, experts said.

China welcomes foreign firms to thrive in its market while benefiting from its development. Meanwhile, we encourage other countries to create favorable business environments for Chinese enterprises, promoting win-win economic globalization, Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, told the Global Times on Wednesday.

Jin Zhuanglong, the head of MIIT, noted during this year's two sessions in March that "advancing new industrialization requires deepening reforms and expanding openness."

Widening foreign access to value-added telecom services serves as one of the critical fulfillments of the plan.

The pilot project aims at proactively aligning with international high-standard economic and trade rules, continuously optimizing the business environment for foreign investment, and facilitating the establishment of a new development paradigm, according to the ministry.

The pilot project is in line with China's commitment to shortening the negative list for foreign investment. All market access restrictions on foreign investment in manufacturing will be abolished, and market access restrictions in services sectors, such as telecommunications and healthcare, will be reduced, according to the Government Work Report released in March.

Opening up the telecommunications sector, which is a highly sensitive sector crucial for national security, demonstrates China's confidence. Meanwhile, the pilot approach also reflects the government's cautious and prudent stance, Fu Liang, a Beijing-based tech analyst, told the Global Times on Wednesday.

The move will bring in high-quality overseas enterprises to enrich consumer choices and stimulate domestic innovation, and enhance industry standards and international competitiveness.

Particularly in the internet data center sector, it will attract quality foreign data centers and cloud service firms, bolstering China's computing infrastructure, experts noted.