- Pilot plan eliminates need for foreign companies to form Chinese joint ventures
- In these regions the 50% limit on foreign ownership has been eliminated
- The United States says that China represents “an unacceptable risk”
China has reportedly expanded a pilot program it has been running since last year, allowing foreign telecommunications companies greater access to its market, despite tensions with the United States seeing 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 opposite measures: the United States seeks restrictions and China seeks greater openness.
According to the update, China has lifted the 50% foreign ownership limit on telecom value-added services within specific regions that are included in the pilot program, meaning companies can now establish foreign-owned operations instead of having to join together in a partially Chinese joint venture.
Beijing, Shanghai, Hainan, Shenzhen and other areas have been approved under the plan, and the permitted projects cover Internet data centers, Internet access and information services, for example. SCMP information.
“I don’t think there will be a significant impact on the domestic market,” said Yang Guang, senior analyst at Omdia. China’s telecommunications market is already packed with established domestic players, meaning foreign companies could be forced to gain significant 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 expand this scheme beyond approved zones and/or beyond telecommunications.
In contrast, the United States maintains that China poses “an unacceptable risk to the national security of the United States or the security of American persons,” which is why it closely scrutinizes the involvement of foreign companies in critical national infrastructure.
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