Ministry of Information Industry, Circular on Strengthening the Administration of Foreign Investment in the Operation of Value-added Telecommunications Business

Issued: July 13 2006

Main contents: The Circular states that certain foreign investors were recently found to have circumvented, together with domestic value-added telecommunications companies, the requirements set out in the Provisions for the Administration of Foreign-invested Telecommunications Enterprises and illegally operated value-added telecommunications businesses in China by means of domain name authorization or registered trademark authorization. Thus, the Circular prohibits domestic telecommunications companies from leasing, transferring or re-selling, in any form, telecommunications business permits to foreign investors under another guise, and from providing in any form conditions such as resources, premises and facilities to foreign investors to illegally operate telecommunications business in China. Offshore listings of domestic telecommunications companies shall be subject to the examination and consent of the department in charge of information industry of the State Council, and shall obtain approval in accordance with relevant state provisions. Internet domain names and registered trademarks used by value-added telecommunications business operators shall be lawfully owned by them (including the companies' shareholders). The Circular also clarifies that "premises and facilities" as referred to in Item (3) of Article 6 of the Measures for the Administration of Telecommunications Business Permits shall be established within the business scope of the business permit and shall be commensurate with the value-added telecommunications business that the operator is approved to operate.
Related legislation: Provisions for the Administration of Foreign-invested Telecommunications Enterprises, Dec 11 2001, CLP 2002 No.1 p.48; PRC Telecommunications Regulations, Sep 25 2000, CLP 2000 No. 9 p.12 and Measures for the Administration of Telecommunications Business Permits, Dec 26 2001, CLP 2002 No.1 p.16