China lifts telecom foreign ownership cap in pilot zones to counter US sanctions
China's Ministry of Industry and Information Technology (MIIT) is launching pilot programs in select regions to allow wholly foreign-owned enterprises to operate value-added telecom services, including Internet data centers, content delivery networks, and cloud computing services. This move eliminates a 50% foreign ownership cap, aiming to attract new capital and counter US sanctions on high-end chip imports and cloud technologies. The initiative seeks to encourage competition, innovation, and digital infrastructure growth within China's technology sector.
Key Takeaways
- MIIT's pilot programs allow 100% foreign ownership for value-added telecom services in regions including Beijing, Shanghai, Hainan, and Shenzhen.
- The policy targets Internet data centers, content delivery networks, and cloud computing services.
- The move is a strategic response to US trade restrictions on high-end chip imports and cloud technologies.
- Foreign companies operating in these pilot zones must still comply with national cybersecurity and data residency laws.
Why It Matters
This regulatory shift opens new avenues for foreign streaming infrastructure providers seeking direct market access in China, potentially increasing competition and innovation in video delivery and cloud services. While pilot programs are limited to specific regions, the removal of ownership caps signals Beijing's intent to attract foreign capital despite geopolitical tensions. Industry players should monitor the adoption rate by international firms and observe how compliance with local data laws impacts operational freedom and service offerings within these newly accessible markets. Further expansion of these pilot zones remains a key indicator for broader market liberalization.
Additional Context
China has approved 166 foreign-invested telecommunications entities to operate value-added services since February 2025, according to China Daily (June 2026). While this marks a step towards greater market accessibility, industry analysts suggest the impact on China's domestic telecom landscape may be limited due to existing competition and the pilot zones' restricted scope (SCMP, June 2026). Over 3,100 foreign-invested telecom enterprises are currently operating in China, and the MIIT intends to expand telecom service openness in a planned manner, ensuring market order and security (Shanghai.gov.cn, June 2026). This wider access to value-added telecom services for foreign companies, including internet data center operations, internet access services, and information services, aligns with China's broader efforts to attract foreign investment and adhere to international trade commitments (Digital Watch Observatory, June 2026).
Read full article at techradar.com
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