Welcome move as Beijing relaxes rules on VPN
- New regulations will allow some users in the capital to bypass China’s “Great Firewall” to access sites such as Google and Facebook
Cybersecurity remains paramount in China, but it has to be reconciled with the need to further open up the country’s economy for foreign investment. Amid a slowing economy and a flattening trajectory of growth, the city of Beijing has taken the lead by unveiling plans to allow overseas firms to invest in up to 50 per cent ownership of virtual private network services, within a trial zone, by the year’s end.
The networks allow users to bypass China’s “Great Firewall” to access global information and communications sites such as Google and Facebook. A relaxation of restrictions approved earlier this year by the State Council is aimed at attracting foreign telecoms operators to provide VPN services to foreign-invested firms in the capital, according to the Beijing Municipal Bureau of Commerce.
China plans to open up VPN services in Beijing to foreign investment
The new policy represents a significant change of mindset, given that the authorities have taken action against companies and individuals in the past for having offered VPN services in the country. As an incremental signal that China is increasingly open for business and committed to globalisation through integration with the world system, the new measures have to be welcomed.
They are part of a three-year plan unveiled by the Beijing municipal government to open up the services sector, following a slowdown in the city’s growth to 6.3 per cent, in line with the national figure, in the first half of 2019, along with a fall of 2.5 per cent in municipal fiscal revenue to 317 billion yuan (HK$352 billion).
The relaxation is targeted at the engines of future economic growth – services and consumption-related industries. Aidan Yao, senior emerging Asia economist at AXA Investment Managers, sees them as part of a concerted move to further open up China to the rest of the world. Currently, individuals and organisations are only able to connect to the internet through channels provided by the government. But when the relaxation is introduced, they will no longer be blocked from access to 135 of the world’s top 1,000 websites, including Google, Facebook, Twitter and YouTube. Online games as well as video and audio will also be covered by the relaxation, subject to content oversight and data security standards.
