China Invites Foreign Investors to Invest in VPN Services

China Invites Foreign Investors to Invest in VPN Services

Amongst the world’s 1000 most popular websites, China has blocked access to 135 of them. It uses its Great Firewall for doing so. Some of the websites blocked are Google, Facebook, Twitter, and Youtube. Using these websites in China was considered to be a punishable offense. The USA has asked China to open up its internet entirely but China has different plans. It plans to attract foreign direct investment (FDI) starting from the city of Beijing. This will be achieved by permitting foreign investors to invest in Virtual Private Network (VPN) services within a certain period by the end of 2019.

Virtual Private Network (VPN) services provide users with the opportunity to visit blocked sites by bypassing the Firewall. China wants foreign investors to invest in VPN service providers which will help users bypass the Great China Firewall and access different block sites. However, the maximum capping limit for foreign investors stands at 50%. This plan is mainly meant to attract foreign network service providers and telecommunication operators to set up their operations in China. Not only will this result in higher FDI and job creation but will also help China further penetrate the global system.

By implementing this, China is trying to show the world that it’s open to new business opportunities and is ready to embrace globalization. China’s latest policies are considerably important as they revolve around services and consumption linked industries that are considered the power source of future growth. These policies coupled with reductions in tariffs and opening up the capital account will aid China in blending in with the rest of the world.

This is the first step by China towards attracting FDI as the Chinese Government claims that very soon China will open to foreign investment in other industries like video games. However, this will be implemented under careful supervision and only if the Chinese data security standards are met. China also plans on opening up its financial industry for more overseas financial companies to set foot in the Chinese market.

Before the wide implementation of a policy, the Chinese Government first tests it out in a ‘trial zone.’ Other Chinese industries that are predicted to soon open their pilot experiments in trial zones are finance, tourism, education, technology, etc. At the commencement of August 2019, SWIFT (interbank messaging provider) started its subsidiary in Beijing.