- The pilot scheme removes the need for foreign companies to form Chinese JVs
- The 50% cap on foreign ownership has been lifted in these regions
- US claims China poses ‘unacceptable risk’
China has reportedly expanded a pilot program it has been running since last year, giving foreign telecommunications companies more access to its market, despite tensions with the United States that see Chinese companies actively blocked.
This important update comes as US regulators continue to block Chinese telecom operators on national security grounds.
As a result, what we are seeing are opposing measures, with the US pursuing restrictions and China pursuing greater openness.
According to the update, China has now lifted the 50% foreign ownership limit on value-added telecommunications services within specific regions covered by the pilot project, meaning companies can now establish foreign-owned operations instead of having to join under a partially Chinese joint venture.
Beijing, Shanghai, Hainan, Shenzhen and other zones are approved under the scheme, and the permitted projects span Internet data centers, Internet access and information services, as per SCMP reporting.
“I don’t think there will be a significant impact on the domestic market,” said Omdia senior principal analyst Yang Guang. China’s telecom market is already crowded with established domestic players, meaning foreign companies may find it had to gain meaningful market share.
China’s Ministry of Industry and Information Technology (MITT) has approved licenses for 166 foreign companies since February 2025.
It is unclear whether China plans to extend this arrangement beyond the approved zones and/or beyond telecommunications.
Conversely, the United States maintains that China poses “an unacceptable risk to the national security of the United States or the safety and security of American persons,” and is therefore investigating the involvement of foreign firms across critical national infrastructure.
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