The Chinese cabinet has approved a new plan that will allow foreign telecoms to own up to 50% of the capital of joint ventures that will provide VPN services to foreign companies operating in Beijing. As Caixin reports, foreign companies operating in China rely on VPN services to connect to their corporate networks abroad, as well as to access sites and services blocked by the country's vast firewall. Beijing first revealed its plan to allow foreign companies to invest in VPN services in a test zone in August last year. As of January 2017, telecommunications and Internet service providers offering VPN services are required to obtain licenses from China's Ministry of Industry and Information Technology. At the same time, the country launched a crackdown on unlicensed VPNs. According to the Beijing municipal communications administrations, there are currently around 20 licensed VPN operators in China, including Beijing Sinnet technology and cable TV operator Beijing Gehua CATV Network. Beijing's new plan will give foreign companies more choice over their VPN provider, while also opening up the market for foreign telecoms that want to form joint ventures to offer VPN services in the country.
Open for business
In January last year, UK telecoms giant BT Group became the first international company to obtain nationwide ISP licenses and a license to offer VPN services in China. These licenses allow BT China Communications' Chinese joint venture to provide VPN services to foreign companies operating in the country, as well as the ability to bill them in local currency. In addition to VPN services, the recently approved plan will also allow multinational companies in Beijing to set up entirely foreign financial services companies. This will support acquisitions of third-party payment companies, remove foreign ownership limits on information services companies, and help foreign companies offer software-as-a-service (SaaS) offerings. As China opens up its VPN and financial services sectors to foreign companies, the US State Department is doing the exact opposite with its Clean Network program, which is currently used to prevent Chinese telecom operators like China Telecom Corp and China Unicorn doing business. in the countryside. By opening up investments in VPN services to foreign companies, China could finally soften its historically tough stance on VPN use within its borders.- Also check out our full list of the best VPN services.