China's Ministry of Industry and Information Technology (MIIT) is opening the doors to foreign-owned data centers.
The MIIT has launched a pilot project aimed at opening up the country for telecom services funded by foreign enterprises, reports Xinhua News Agency.
The pilot applies to four designated areas in Beijing, Shanghai, Hainan, and Shenzen.
Foreign investors will be able to operate fully-owned businesses in these areas, including data centers and engaging in online data processing. The companies will also have greater access to Chinese cloud computing services and computing power services.
"The pilot program marks a new phase of China's opening-up in the telecommunications sector," said Jin Zhuanglong, minister of industry and information technology.
The move is hoped to help diversify market supply in the country, and enable China to "share" its digital economy with the rest of the world.
Among those interested in taking advantage of the pilot project is HSBC Fintech Services Shanghai Company Limited, HSBC's wholly foreign-owned fintech subsidiary in China. The company is reportedly looking to apply for an "Internet content provider" permit.
Tesla is another company that has applied to be part of the pilot project. With a Gigafactory located in Shanghai, the automaker will now be able to access China's cloud computing services.
In September 2,200 foreign-invested firms received their telecom business licenses according to the MIIT.
Plans to lift investment limitations on telecommunications services were first shared in April 2024, though it has only just gone into effect. Previously, foreign investors could only hold up to 50 percent of local telecoms businesses.
The move will also enable US companies such as Microsoft and AWS, which have previously operated Chinese data centers through local partners, to develop their own China data centers. However, it is unclear how current chip restrictions would limit the practicality of this.
Vietnam made a similar move to open up its data center market to foreign investors earlier this year, officially removing the 49 percent ownership cap in the country in July.