January 22, 2014

The Ministry of Industry and Information Technology and the People's Government of Shanghai Municipality jointly released the Opinions on Further Establishing Telecom Value-added Services in China (Shanghai) Pilot Free Trade Zone (the "Opinions"), deciding to further establish telecom value-added services in the pilot zone.

The Opinions propose to further establish seven telecom value-added service sectors in the pilot zone, including the following two aspects: (1) apart from the establishment of information service, store-and-forward services and online data processing and trade processing services which have been committed by the Chinese government to open under the WTO framework and in which the foreign shareholding proportion is no more than 50%, the restriction on the foreign shareholding proportion in these three services will be further relaxed, such that no restriction is imposed on the foreign shareholding in application stores under the information service and store-and-forward service, and the foreign shareholding proportion is relaxed to 55% in e-commerce business under the online data processing and trade processing service; (2) four new services will be introduced in the pilot zone, including call centre service, communication service for multiple domestic parties, Internet access service for users and domestic Internet VPN service, for which there is no restriction on the foreign shareholding proportion in relation to the first three services and the foreign shareholding proportion shall not exceed 50% in the domestic Internet VPN service.

(Source:LexisNexis)