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Overview
On January 16, 2025, the General Office of the Shanghai Municipal People's Government issued the Implementation Plan for Promoting the High-Quality Development of Digital Trade and Service Trade in Shanghai (in Chinese 上海市推动数字贸易和服务贸易高质量发展的实施方案, the "Plan"), announcing to lift the restrictions from Internet Data Centers, Content Delivery Networks, and Application Stores in the Lingang Special Area and Pudong New Area of Shanghai.
Key Highlights of the Plan in Respect of Telecommunication Services
Pilot Expansion of Value-Added Telecommunications Services
In furtherance of the strategic initiative to expand the openness of value-added telecommunications services, the Lingang Special Area and Pudong New Area shall leverage their superior digital infrastructure to facilitate the establishment of wholly foreign-owned Internet Data Centers, Content Delivery Networks, and Application Stores. This initiative aims to attract foreign investment in internet access services, online data processing and transaction processing, as well as information protection and processing services.
Summary of the Plan
1. Promote Digital Delivery Service Trade[1]
（1）
Expand value-added telecommunications services in Lingang Special Area[2] and Pudong New Area[3] by attracting foreign investment in wholly-owned Internet Data Centers, Content Delivery Networks, and Application Stores. Encourage foreign capital in internet access services, online data processing, transaction processing, and information protection services.
（2）
Focus on cultural trade to expand digital product trade by promoting Shanghai's top cultural trade brands through the "Thousands of Sails Going to Sea" initiative[4] and hosting international gaming and film events.
（3）
Develop high-end service outsourcing by implementing the "enterprise - to – item" regulatory model[5] for importing items used in biopharmaceutical research and enhancing the role of national digital service export bases. Support the development of shared service centers by multinational companies.
（4）
Accelerate the integration of digital technology trade and industry by creating international industry clouds, promoting the integration of design and manufacturing, and deepening international cooperation in artificial intelligence.
2. Expand Digital Subscription Trade
（1）
Optimize the supervision of cross-border e-commerce sea and air transport by facilitating the handling of electric, magnetic, and cosmetic goods in air freight.
（2）
Enhance financial service support for cross-border e-commerce by innovating credit insurance products and simplifying foreign exchange procedures for small and micro enterprises. Improve cross-border RMB settlement services.
（3）
Expand cross-border e-commerce import business by encouraging foreign e-commerce platforms to establish regional headquarters in Shanghai and optimizing the return process for direct purchase imports.
3. Proactively Layout Digital Infrastructure
（1）
Accelerate the construction and expansion of high-level network infrastructure, including 5G and fiber broadband networks. Promote the construction of undersea cables and expand international Internet data channels.
（2）
Develop high-performance computing infrastructure by building cloud computing data centers, public computing service hubs, and large-scale commercial computing facilities. Explore data centers with international service capabilities in Hongqiao International Central Business District.
（3）
Construct high-quality data infrastructure, including blockchain and data repositories, to facilitate cross-border data flow and support data element construction.
4. Innovate and Enhance Service Trade
（1）
Empower shipping service trade through digitalization by building smart ports, promoting electronic documents, and enhancing international shipping information platforms.
（2）
Accelerate financial and insurance service trade by enhancing the functionality of the Cross-Border RMB Payment System[6], attracting bond issuance, and supporting international transactions in energy and metal products. Establish an international reinsurance functional zone in Lingang Special Area.
（3）
Develop service trade systems to support the aviation industry by exploring new business models such as aviation material leasing and building an aviation asset trading platform.
（4）
Promote green service trade by supporting the import of energy-saving and environmental protection technologies and services, and enhancing the construction of the carbon emission trading market.
5. Strengthen Enterprise and Regional Development
（1）
Enhance the capabilities of leading enterprises by updating the Shanghai Service Trade Promotion Catalog annually and supporting the participation of enterprises in international digital trade standards.
（2）
Establish a Shanghai DEPA (Digital Economy Partnership Agreement)[7] Cooperation Zone to promote cooperation in electronic documents, e-commerce, and digital payments. Designate Lingang Special Area as the core carrier of the DEPA Cooperation Zone.
（3）
Create a "Silk Road E-commerce" Cooperation Pilot Zone[8] to expand institutional openness in e-commerce and promote new business models such as live-streaming e-commerce. Build cooperation platforms and participate in global trade aid actions.
（4）
Establish an International Data Economy Park in Lingang Special Area to pilot innovative cooperation in digital trade.
（5）
Enhance the scale effect of service trade clusters by developing distinctive service trade zones in Pudong, Hongkou, and Yangpu districts. Encourage innovation incubators and optimize export credit insurance services.
6. Facilitate the Flow of Trade Elements
（1）
Promote and regulate cross-border data flow by developing negative lists and guidelines for data export in China (Shanghai) Pilot Free Trade Zone[9] (including Lingang Special Area).
（2）
Facilitate cross-border movement of natural persons by expanding international training functions in key areas and optimizing APEC Business Travel Card[10] services.
（3）
Optimize cross-border capital flow management by supporting digital RMB settlement and piloting international electronic invoicing and payment solutions.
（4）
Leverage trade fairs to promote trade by hosting major international conferences and exhibitions and supporting enterprises in participating in overseas events.
Implications
In recent years, China has been gradually and steadily promoting the opening up of the telecommunications sector. Shanghai's new Plan is in line with the national policy direction and demonstrate Shanghai's determination to become a global hub for digital trade and service trade.
However, the Plan does not include specific implementation rules but instead leave room for the state level to decide. This practice aligns with our understanding of the regulation of value-added telecom services in China.
A Glance of Open-Up Policies in Telecommunication Services Since 2024.
The chart below summarizes the key open-up policies in Telecommunication Services since 2024:
向下滑动阅览
Authors
Morgan Jiang
Partner
Corporate & Commercial Group
morgan.jiang@cn.kwm.com
Areas of Practice：foreign direct investment, cross-border mergers and acquisitions, and corporate and asset restructuring and divestiture.
Mr. Jiang has extensive experience in cross-border mergers and acquisitions. He represented many well-known multi-national corporations in their investment and divestment process in China in various industries, including traditional manufacturing, automotive, aerospace, and chemical and agriculture industries. The legal services he provides include project structuring and strategic planning, due diligence, drafting and negotiation of transaction documents, provision of legal advice on various related issues, closing as well as resolving post-closing issues. He has advised clients from a wide range of industries.
Chaojun Zhang
Counsel
Corporate & Commercial Group
zhangchaojun@cn.kwm.com
Areas of Practice：cross-border mergers and acquisitions, foreign direct investment, and corporate and asset restructuring and divestiture.
Wenqing Guo
Lead Associate
Corporate & Commercial Group
Thanks to intern Wang Teng for his contribution to this article.
往期文章
Expansion of Foreign Investment in Value-added Telecommunication
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