China Widens Telecommunications Sector to Foreign Investment in Four Cities
In a significant policy shift, China’s Ministry of Industry and Information Technology (MIIT) has launched a pilot program to further open the country's telecommunications sector to foreign investors. The initiative, announced on October 23 during a working forum organized by the MIIT, marks a substantial step following the unveiling of the pilot plan in April.
MIIT Minister Jin Zhuanglong highlighted that the formal commencement of the pilot in Beijing, Shanghai, Hainan, and Shenzhen signifies a new phase in China's telecommunications industry opening up to international competition. Jin emphasized the need to set a benchmark, listen to the development demands of foreign enterprises, provide policy guidance, optimize service management, and protect the rights of foreign investors in accordance with the law. He also stressed the importance of summarizing the pilot experience to explore new business forms and drivers, aiming to build a high-level platform for open cooperation and exchange.
During the forum, the MIIT issued letters to the four regions to proceed with the pilot.
According to previously disclosed information, the pilot will focus on the following areas:
Geographic Scope: The entire administrative regions of Beijing, Shanghai’s Pudong New Area, Hainan Free Trade Port, and Shenzhen Demonstration Area for Socialism with Chinese Characteristics.
Business Scope: Following the pilot's implementation, foreign-funded enterprises, upon approval, will be allowed to operate independently in services such as Internet Data Centers (IDC), Content Delivery Networks (CDN), Internet Service Providers (ISP), online data processing and transaction handling, and certain information services, excluding platforms for the release and delivery of information (internet news, online publishing, audiovisual content, and internet cultural operation), as well as information protection and processing services.
Other Requirements:
The registered location and the placement of service facilities of the business operator must be within the same pilot area, prohibiting the purchase or rental of CDN and other facilities outside this pilot area to provide acceleration services.
The scope of Internet Service Provider (ISP) business is limited to the pilot area and must be provided through the internet access equipment of basic telecommunications enterprises in accordance with the "Telecommunications Business Licensing Management Method." Other business services may be provided nationwide.
Regulatory Requirements: Foreign-invested telecommunications enterprises conducting the aforementioned value-added telecommunications services in the pilot regions will be managed in accordance with the "same treatment for domestic and foreign investments" principle. These enterprises must obtain relevant pilot approvals for telecommunications business operations according to the "Telecommunications Regulations" and other provisions, comply with laws, regulations, and pilot approval-related rules during their business operations, and accept and cooperate with the supervision and management of telecommunications regulatory authorities and relevant administrative departments.
The MIIT will soon release detailed rules for the application of relevant business licenses, and enterprises interested in applying are welcome to contact for further consultation.
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