The Ministry of Industry and Information Technology of the PRC released a circular on the launch of pilot scheme for the further opening up of value-added telecommunications services on 10 April 2024, which announces to expand the opening up of value-added telecommunications services sector to foreign investment in several pilot areas. The pilot areas shall submit a pilot implementation plan to the Ministry of Industry and Information Technology of the PRC and obtain an approval to implement the pilot opening up measures.

According to the circular, the pilot scheme will be launched in the following areas:

1. Beijing Comprehensive Pilot Demonstration Zone for Expanding Opening-up of Service Industry (covering all regions of Beijing City)
2. Lingang New Area of the China (Shanghai) Pilot Free Trade Zone and the pioneer area for socialist modernization in Shanghai (Pudong New Area of Shanghai City)
3. Hainan Free Trade Port (covering all regions of Hainan Province)
4. Shenzhen Pilot Demonstration Area of Socialism with Chinese Characteristics (covering all regions of Shenzhen City)

The restrictions on the foreign equity ratio for the following value-added telecommunications services will be removed in the pilot areas:

1. internet data centers (IDC)
2. content delivery networks (CDN)
3. internet service providers (ISP)
4. online data processing and transaction processing
5. information publishing platforms and information delivery services (excluding services related to internet news information, online publishing, internet audio-visual program, internet cultural operations)
6. information protection and processing services

The registered address and location of service facilities of the provider of pilot value-added telecommunications services must be located in the same pilot area. It is not allowed to purchase or rent CDNs or other facilities outside the pilot area to carry out acceleration services. The service scope of internet access services shall be limited to the pilot area and the internet access services shall be provided to the users through the internet access equipment of basic telecommunications enterprises. The service scope of other value-added telecommunications services can be nationwide.

Notes:
(1) According to the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Edition), foreign investment shall be subject to the telecommunications services opened up pursuant to China’s WTO commitments. The foreign equity ratio for the value-added telecommunications services (except for e-commerce, domestic multi-party communications, storage-forwarding and call center) shall not exceed 50%.
(2) The pilot opening up of internet data center (IDC) and content delivery networks (CDN) services are not included in China’s WTO commitments for telecommunications services.

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