Foreign investment control relaxed in FTZ
Print Edition
Overseas firms will be allowed to own over 50 percent of some telecommunications joint ventures in the Shanghai free trade zone as part of China’s latest move to open the state-controlled industry.
This is also one of changes, announced by the Chinese government yesterday, to a raft of measures on foreign investment approval and admission within the pilot FTZ.
For the first time, foreign capital is allowed to own more than 50 percent of online application stores and online storage business in the FTZ, the Ministry of Industry and Information Technology said yesterday. Foreign investors can own no more than 55 percent in online data and transaction processing business which is mainly for e-commerce, the industry regulator said.
In the value-added telecom service industry, China will further open four sectors — calling center, Internet access, multi-side voice and video communications services and virtual private network business — in the FTZ to foreign capital. Foreign investors will be allowed to increase their stake to over 50 percent, previously the limit for joint ventures.
“The new policy represents China’s further opening in the telecommunications industry and is expected to make the market fairer and more transparent,” the ministry said in a statement posted on its website.
All FTZ-registered telecom business, except the Internet access business, will be allowed to offer services nationwide, the statement said.
The State Council, China’s Cabinet, also said in a statement yesterday that 24 kinds of administrative approvals in the FTZ will be suspended for business fields outside a “negative list” identifying bans or restrictions on foreign investment, and be replaced by a report-based management.
Adjustments to administrative approval measures mainly include changes to procedures for the establishment and management of foreign-invested enterprises and Chinese-foreign joint ventures in the zone, in an effort to reform the country’s foreign investment management and open the service sector wider to overseas investors, the State Council said.
Besides telecom, the government will also relax controls over foreign investment in fields including international shipping, credit investigation, entertainment and training within the zone.
New measures for the zone will be made by related government departments, according to the State Council.
The newly-opened telecom sectors, such as storage, data analysis and e-commerce, are closely related to technologies like cloud computing and Big Data as strategic sectors for the country to develop, analysts said.
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