On October 23, 2024, the Ministry of Industry and Information Technology (“MIIT”) launched a pilot program expanding foreign access to value-added telecommunications services in four pilot regions, namely, Beijing, Shanghai, Hainan, and Shenzhen. Foreign enterprises participating in this pilot program can now wholly own and operate internet data centers (IDCs) and engage in online data processing and transaction handling businesses, which would give them opportunities to participate more extensively in China’s computing power and cloud service markets.

Earlier this year on April 8, MIIT released the “Notice on Launching a Pilot Program to Expand Foreign Access to Value-Added Telecommunications Services” (the “Notice”). According to the Notice, the pilot regions will lift foreign ownership restrictions for IDCs, content distribution networks (CDNs), internet access services (ISPs), online data processing and transaction handling, information services for publishing platforms and delivery services (excluding online news, online publishing, online audiovisual, and internet culture business operations), and information protection and processing services.

MIIT emphasized its commitment to helping the pilot regions implement the pilot program efficiently, promote the new policy, and optimize service management. The government aims to encourage foreign enterprises to participate in the pilot program, explore innovative business models, and, based on the program’s outcomes, further revise and refine the new policy to align with high-standard international trade rules. China also plans to continually improve the telecommunications market environment and expand the pilot program to additional regions as appropriate.