China's Ministry of Industry and Information Technology (MIIT) has reportedly kicked off a pilot programme to allow foreign investors to operate wholly-owned data centres and other telecoms-related services in select locations.
According to a report from state-owned Xinhua News Agency on Wednesday, the pilot opens up “value-added telecom services” in four designated free-trade areas in Beijing, Shanghai, Hainan and Shenzhen.
Under the pilot, foreign firms are allowed to operate their own data centres, and also engage in online data processing and transaction processing within the four free-trade areas, the report said
The MIIT also said foreign companies will also have greater access to China's cloud computing service markets under the scheme, the report added.
The MIIT said it will monitor the pilot programme’s progress “and expand its scope at an appropriate time.”
The MIIT first announced the pilot programme in a circular released in April 2024. Xinhua reported at the time that the value-added telecom services to be opened up under the programme included “internet data centres, content delivery networks and internet service providers, online data processing and transaction processing, information publishing platforms and information delivery services excluding services related to internet news information, online publishing, internet radio and television, internet culture management, and information protection and processing services”.
Outside of the pilot programme, such services are limited to domestic companies. At most, foreign investors must enter a joint venture with a local firm and cannot own a controlling stake in the JV.
The MIIT claims that 2,220 foreign-invested companies have been licensed to operate telecom businesses in China as of the end of September 2024.
Wang Zhiqin, deputy director of the China Academy of Information and Communications Technology, told Xinhua the pilot would further facilitate integration of digital technologies with various sectors, as well as “align domestic industry systems and regulatory frameworks with high-standard international economic and trade rules.”
The MIIT also said that the programme would further diversify China’s market supply and enable it to export its digital economy innovations.
Xinhua also reported that HSBC's wholly foreign-owned fintech subsidiary, HSBC Fintech Services (Shanghai) Company Limited, is already getting ready to apply for an internet content provider permit that it says would help it enrich app content and advance its digital business transformation.
According to state-owned newspaper China Daily, Tesla has also applied to be part of the pilot, which will enable its Gigafactory in Shanghai to access China's cloud computing services. Siemens' digital health subsidiary, Siemens Healthineers, has also joined the programme, the report said.
