The Chinese mainland is set to boost its telecom sector by lifting restrictions on foreign investment in value-added services. Announced by the Industry and Information Technology Ministry on Wednesday, this initiative will initially roll out in five pilot areas: Beijing, Shanghai, Shenzhen, and Hainan, before expanding to other cities.
Under the new policy, qualified foreign investors can establish wholly-owned businesses in areas such as internet data centers, content delivery networks, and internet service providers. Previously, foreign entities were limited to a 50-percent stake in these services.
This move marks China's continued efforts to align with high-standard international economic and trade regulations, allowing foreign companies to partake in China’s growth while enhancing the services offered by domestic firms. Wang Zhiqin, deputy director of the China Academy of Information and Communications Technology, highlighted that the relaxation will enrich product and service offerings, stimulate innovation, and improve global competitiveness in the Internet of Things industry.
Experts view this policy shift as a strategic step to provide more cloud computing options for domestic enterprises, especially amid a global shortage of computing power. Since 2018, China has seen a compound annual growth rate of over 30 percent in data center racks, reflecting the rapid expansion of its telecom infrastructure.
By the end of March this year, nearly 1,926 foreign-funded enterprises had been approved to operate in China’s telecommunications sector. Additionally, Vice Minister of Commerce Guo Tingting announced at the China Development Forum 2024 that further market access restrictions in manufacturing and other sectors like medical care will be lifted to create more opportunities for foreign investors.
With these developments, China aims to solidify its position as a global tech hub, fostering collaboration and innovation that benefits both foreign investors and the domestic market.
Reference(s):
China to lift foreign investment curbs in value-added telecom services
cgtn.com
