China Lifts Restrictions on E-Commerce Foreign Investment

On June 19, the Ministry of Industry and Information Technology (MIIT) announced that e-commerce online data processing and transaction processing businesses will be opened to 100 percent foreign ownership across China, effective immediately. According to the MIIT announcement, foreign-invested enterprises will now be able to apply for permission of to hold a 100 percent stake in e-commerce online data processing and transaction processing businesses in China, but are still subject to other requirements of approval conditions and procedures as regulated in the Management Rules of Foreign-Invested Telecommunications Companies (State Council Circular No. 534).

This announcement of greater opening to e-commerce foreign investment is based on the previous pilot program in Shanghai Free Trade Zone that began in January 2015. All provincial and municipal communications administrations will be responsible for administering and implementing this new policy. The objective, as stated in the MIIT announcement, is to "guide and monitor foreign investment in this sector, strengthen post regulation, and improve the healthy development of e-commerce."