China to allow foreign companies to run data centres and offer telco services

According to a report from state news agency Xinhua, the pilot ‘allows foreign investors to operate wholly-owned businesses such as internet data centres and engage in online data processing and transaction processing in the designated areas.’ The designated areas being Beijing, Shanghai, Hainan and Shenzhen.

HSBC's fintech subsidiary in China is preparing to apply for an internet content provider permit, says Xinhua, while China Daily reports that Tesla is also among the first group of companies participating in the trial.

The goal of the scheme is for China to align itself with international economic and trade rules, diversify market supply, boost innovation, and ‘share the benefits of its digital economy with the rest of the world’, says Xinhua.

This is part of a plan to reduce market barriers for foreign investment in the Chinese telecoms sector, and as of September, 2,220 foreign-invested companies have been licensed to operate telecom businesses in the country, we’re told in the Xinhua report.

"The pilot program marks a new phase of China's opening-up in the telecommunications sector," Jin Zhuanglong, Minister of Industry and Information Technology is quoted as saying in the report, and he also apparently urged continued efforts to improve the business environment for foreign investors and explore more business models and growth drivers.

Wang Zhiqin, Vice-President of the China Academy of Information and Communications Technology said: "China is enabling foreign players to share the dividends offered by the Chinese market. In return, such moves will help the country attract and utilize foreign investment more effectively, and enrich the variety of products and services for local consumers," according to China Daily.

The MIIT said it will ‘closely monitor the program's effects and expand its scope at an appropriate time,’ according to Xinhua.