China lifts telecom foreign ownership cap in pilot zones to counter US sanctions

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.

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).