China launches pilot program to expand opening-up in value-added telecom services

An aerial drone photo taken on March 28, 2024 shows the construction site of the China Telecom smart city industrial park in Xiong'an New Area, north China's Hebei Province. (Xinhua/Mu Yu)

China's Ministry of Industry and Information Technology (MIIT) on Wednesday launched a pilot program to expand opening-up in value-added telecom services in four designated areas in Beijing, Shanghai, Hainan and Shenzhen.

The pilot program allows foreign investors to operate wholly-owned businesses such as internet data centers and engage in online data processing and transaction processing in the designated areas. They will also have greater access to China's cloud computing service and computing power service markets.

The pilot areas are Beijing's national comprehensive demonstration zone for expanding opening-up in the service sector, the Lingang new area of the China (Shanghai) Pilot Free Trade Zone and the pioneer area for socialist modernization in Shanghai, the Hainan Free Trade Port, and the Shenzhen pilot demonstration area of socialism with Chinese characteristics.

"The pilot program marks a new phase of China's opening-up in the telecommunications sector," said Jin Zhuanglong, minister of industry and information technology. He urged continued efforts to improve the business environment for foreign investors and explore more business models and growth drivers.

With the pilot program, China aims to actively align itself with high-standard international economic and trade rules, further diversify market supply, boost innovation vitality, and share the benefits of its digital economy with the rest of the world.

The pilot program is among China's latest efforts to reduce market barriers for foreign investment in its telecommunications sector. As of September, 2,220 foreign-invested companies had been licensed to operate telecom businesses in the country, according to the MIIT.

The ministry said it will closely monitor the program's effects and expand its scope at an appropriate time.

Wang Zhiqin, deputy director of the China Academy of Information and Communications Technology, said the pilot program would further facilitate the integration of digital technologies with various sectors.

Additionally, the program will help align domestic industry systems and regulatory frameworks with high-standard international economic and trade rules, Wang said.

Following the launch of the pilot program, HSBC Fintech Services (Shanghai) Company Limited, HSBC's wholly foreign-owned fintech subsidiary in China, is preparing to apply for an internet content provider permit.

In a statement, the company said the pilot program will enable it to enrich the content of its apps and help advance its digital business transformation and development.