In a landmark move, China has enabled the removal of restrictions on foreign ownership of cloud and data center services. This is significant for a country where until now, foreigners have not been allowed to own more than 50 percent equity in data centers.
The decision came to light this Sunday, when the “Negative List” released by China’s National Development and Reform Commission cut sectors barred from foreign investment from 31 to 29. Effective November 1, all restrictions to foreign investments into China’s manufacturing sector will be lifted.
Significantly for the digital infrastructure industry, restrictions will now be removed for a variety of digital services including cloud and data center services, value-added telecommunication services, internet services etc., especially in regions like Beijing, Shanghai, Shenzen and Hainan.
W.Media had reported recently that China has significantly accelerated its investment in data centers, pouring over 43.5 billion yuan ($6.12 billion) into a nationwide project in recent years. This initiative, known as “Eastern Data, Western Computing,” comes as the country faces growing technological restrictions from the United States.
Readers would recall that the US had imposed export controls on certain advanced computing products, including those from Nvidia, a leading chipmaker. These restrictions have prompted China to intensify its efforts to develop domestic capabilities in high-performance computing.
In light of this, the recent decision to remove restrictions on foreign investment and ownership of data centers, is yet another step by China to build some serious tech muscle and assert its dominance.
Before Sunday’s update, the “Negative List” was last updated in 2021. The move was necessitated by an economic slowdown in the wake of the COVID-19 pandemic. China has also removed restrictions to investments in healthcare, biotechnology.