Number of Foreign-Invested Telecom Enterprises in China Up 21% Since End of 2019
CAICT, 4/09/20
As of the end of March 2020, China's total number of foreign-invested telecom enterprises reached 232, up more than 21% from the end of December 2019, reports the China Academy of Information and Communications Technology (CAICT), a department of China's Ministry of Industry and Information Technology (MIIT).
At present, China's foreign-invested telecommunications enterprises are mainly concentrated in the value-added telecommunications sector. Since opening to the outside world, the types of value-added telecommunications service that have been opened to foreign investment have continued to expand, and restrictions on the maximum permitted proportion of foreign-owned equity have been relaxed. Enterprises open to foreign investment can be categorized into those permitted under WTO policies, under CEPA policies, and under free trade zone policies, with some enterprises open for up to 100% foreign ownership.
Overview
As of the end of March 2020, a total of 232 foreign-invested telecommunications enterprises had been approved in China. Among them, 182 were issued permits by the Ministry of Industry and Information Technology (MIIT), and 50 - those located in the Shanghai Free Trade Zone - were issued permits by the Shanghai Communications Administration (SCA).
Number of Approved Foreign-Invested Telecom Enterprises in China
| Year | Licensed by MIIT | Licensed by SCA | Total Enterprises |
|---|---|---|---|
| 2001 | 3 | 0 | 3 |
| 2002 | 3 | 0 | 3 |
| 2003 | 3 | 0 | 3 |
| 2004 | 6 | 0 | 6 |
| 2005 | 8 | 0 | 8 |
| 2006 | 9 | 0 | 9 |
| 2007 | 15 | 0 | 15 |
| 2008 | 18 | 0 | 18 |
| 2009 | 24 | 0 | 24 |
| 2010 | 27 | 0 | 27 |
| 2011 | 29 | 0 | 29 |
| 2012 | 31 | 0 | 31 |
| 2013 | 34 | 0 | 34 |
| 2014 | 34 | 1 | 35 |
| 2015 | 35 | 12 | 47 |
| 2016 | 46 | 21 | 67 |
| 2017 | 57 | 30 | 87 |
| 2018 | 86 | 35 | 121 |
| 2019 | 145 | 46 | 191 |
| 2020.03 | 182 | 50 | 232 |
Classification by Sector
Among the 232 foreign-invested telecommunications enterprises, the 182 enterprises approved by the Ministry of Industry and Information Technology have a total of 278 business licenses; the 50 enterprises in the free trade zone approved by the Shanghai Communications Administration have a total of 58 business licenses. Of the total number of business licenses, online data processing and transaction processing services, information service enterprises, and domestic call center services comprise the top three, accounting for a combined 86% of all business licenses issued.
Sector Breakdown of Business Licenses Issued to Foreign-Invested Telecom Enterprises in China
| Sector | Licensed by MIIT | Licensed by SCA | Total |
|---|---|---|---|
| Online Data Processing and Transaction Processing | 111 | 36 | 147 |
| Internet Information Services | 89 | 11 | 100 |
| Non-Internet Information Services | 13 | 1 | 14 |
| Domestic Call Center | 21 | 7 | 28 |
| Internet Service Provision ("ISP") | 14 | 1 | 15 |
| Internet Data Center ("IDC") | 13 | 0 | 13 |
| Domestic Internet VPN | 10 | 1 | 11 |
| Domestic Conference Calling | 4 | 1 | 5 |
| Content Delivery Network | 2 | 0 | 2 |
| MVNO | 1 | 0 | 1 |
| Total Business Licenses | 278 | 58 | 336 |
| Total Enterprises | 182 | 50 | 232 |
Geographic Distribution by Location of Registration
China's 232 foreign-invested telecommunications enterprises are spread out across 17 provinces (autonomous regions and municipalities). Among them, the combined number of registered enterprises in Beijing, Shanghai (including the Shanghai Free-Trade Zone), and Guangdong accounts for 70% of the total.
| Location | Number of Enterprises |
|---|---|
| Shanghai Free-Trade Zone | 50 |
| Beijing | 43 |
| Shanghai | 37 |
| Guangdong | 32 |
| Zhejiang | 17 |
| Jiangsu | 17 |
| Sichuan | 7 |
| Tianjin | 5 |
| Fujian | 5 |
| Shandong | 4 |
| Liaoning | 4 |
| Hubei | 3 |
| Anhui | 2 |
| Inner Mongolia | 2 |
| Shaanxi | 1 |
| Henan | 1 |
| Hunan | 1 |
| Xinjiang | 1 |
| Total | 232 |
Classification by Source of Foreign Capital
Among the 232 foreign-invested telecommunications companies, about two-thirds of the foreign capital comes from Hong Kong, followed by the United States and Singapore, with the three combined accounting for roughly 79% of the total.
Classification by Proportion of Foreign Investment
Among the 232 foreign-invested telecommunications enterprises in China, there are 69 wholly foreign-owned enterprises, accounting for approximately 30%; 15 enterprises with a proportion of foreign investment over 50% but less than 100%, accounting for about 6%; 27 companies with 50% foreign investment, accounting for about 12%; 102 companies with over 10% but less than 50%, accounting for roughly 44%; and 19 companies with foreign investment of 10% or less, accounting for about 8%.
| Proportion of Foreign Equity | Number of Enterprises | % of Total Enterprises |
|---|---|---|
| 100% | 69 | 30% |
| Under 100% to Over 50% | 15 | 6% |
| 50% | 27 | 12% |
| Under 50% to Over 10% | 102 | 44% |
| 10% to Over 0% | 19 | 8% |
| Total | 232 | 100% |
Classification by Level of Foreign Investment
The foreign investor may be either a direct shareholder of a licensed company or an indirect shareholder in a single-level or multi-level indirect shareholding structure. Of the 232 foreign-invested telecommunications companies, foreign direct holdings account for approximately 48%; indirect holdings account for approximately 52%.
| Proportion of Foreign Equity | Direct | Indirect - 1 Level | Indirect - 2 Levels | Indirect - 3 Levels |
|---|---|---|---|---|
| Overall | 48% | 32% | 11% | 9% |
| 100% | 62% | 29% | 6% | 3% |
| Under 100% to Over 50% | 20% | 60% | 13% | 7% |
| 50% | 74% | 26% | ||
| Under 50% to Over 10% | 36% | 29% | 18% | 17% |
| 10% to Over 0% | 42% | 47% | 5% | 5% |
Keywords: national statistics VAS wireless regulation foreign investment Internet telecom MIIT MVNO VPN Shanghai Communications Administration call center Internet data center data processing ISP Shanghai Free-Trade Zone license CDN
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