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China will fully open its manufacturing sector and orderly relax entry restriction of foreign capital into telecommunications sector, in order to attract more advanced manufacturing projects, the Ministry of Industry and Information Technology (MIIT) said on Monday.

According to Xiao Yaqing, minister of the MIIT, China will promote the openness of the industrial and information sector, and encourage more organizations and talent to China. Domestic firms are also encouraged to improve their capacity of practicing international operations to integrate further into the global production chain. 

China has been easing the entry restriction of foreign capital into its domestic telecommunications sector over recent years. Last October, foreign investors no longer needed to apply for approval from the MIIT to invest and operate telecommunications sector. 

However, according to relevant regulations, foreign investors are still subject to a 50 percent holding cap when running telecommunications business in China. 

Foreign investors are currently also restricted from participating in telecommunications infrastructure building, Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance told the Global Times on Monday.

“Infrastructure building is still currently undertaken by the four major network operation, including China Mobile, China Telecom, China Unicom and China Broadcasting Network Corporation,” Xiang said, “but foreign capital is permitted to run business such as the SPE services.”

However, according to Xiang, despite the increasingly open telecommunications market, so far there is still no major foreign company that has successfully penetrated China’s telecommunications market, whether by forming joint ventures with Chinese companies or running independent operations. 

“Chinese companies are very competitive in the local market, in sectors including infrastructure building as well as network provisions,” Xiang said, “they also already have an absolute advantage in market share in China.

It will be very difficult for foreign companies to pose real challenges in the near future.”

Global Times