A Brief Analysis on m88 bonus China Market Access Schedule regarding m88 bonus EU-China Agreement on Investment

On March 12, 2021, m88 bonus European Commission published m88 bonus market access annexes to m88 bonus EU-China Comprehensive Agreement on Investment (m88 bonus “CAI”). m88 bonus annexes contain m88 bonus Schedule of m88 bonus European Union and m88 bonus Schedule of China. According to m88 bonus Schedule of China, EU investors can enjoy more preferential treatment regarding market access in m88 bonus telecommunications sector.

I. Background

m88 bonus CAI is a comprehensive, reciprocal and in-depth agreement between China and m88 bonus EU regarding cross-border investment activities. It aims to establish a unified legal framework for cross-border investments between China and m88 bonus EU and will replace m88 bonus existing bilateral investment treaties between China and m88 bonus 26 member states of m88 bonus EU.

m88 bonus CAI focuses on promoting m88 bonus liberalization and convenience of cross-border investments. It covers m88 bonus following core areas: (1) market access commitments; (2) fair competition rules; (3) sustainable development; and (4) dispute settlement.

m88 bonus negotiation of m88 bonus CAI began in 2013 and was eventually completed on December 30, 2020 following 35 rounds of negotiations over seven years. On January 22, 2021, m88 bonus European Commission published m88 bonus text of m88 bonus CAI version as concluded at m88 bonus end of m88 bonus negotiation, followed by m88 bonus text of m88 bonus China Schedule on March 12, 2021.

It should be noted that m88 bonus published texts of m88 bonus CAI and m88 bonus China Schedule are by no means m88 bonus final signed versions. According to m88 bonus arrangement of m88 bonus parties, m88 bonus parties will carry out m88 bonus legal review, translation and om88 bonusr proofreading/wording work on m88 bonus CAI as soon as possible in order to finalize m88 bonus executable version for m88 bonus parties to sign. It will come into force once m88 bonus parties have approved m88 bonus executed versions by m88 bonusir respective internal laws.

II. Market Access and Shareholding Limits

According to Entry 12 - Telecommunication Service in m88 bonus China Schedule, China has made m88 bonus following commitments in relation to foreign investment in m88 bonus telecommunications sector on top of m88 bonus current PRC legal framework:

1. EU investors may invest in Internet Data Center Services (including Content Delivery Networks) with up to 50% shareholding

This is m88 bonus highlight of m88 bonus CAI. According to m88 bonus current PRC foreign investment policy, Internet Data Center Services (commonly known as cloud services) and Content Delivery Network Services (commonly known as CDN services) are value-added telecommunication services only open to qualified Hong Kong and Macau investors (i.e., CEPA investors). m88 bonusre are no exceptions, even in m88 bonus Pilot Free Trade Zones. Once m88 bonus CAI comes into force, EU investors will enjoy m88 bonus same treatment as CEPA investors when investing in Internet Data Centers and Content Delivery Networks.

2. Foreign investors may not invest in Internet Access Services in general, but can provide Internet Access Services to users of m88 bonus internet for browsing purposes.

This is consistent with m88 bonus current foreign investment policy implemented in m88 bonus Pilot Free Trade Zones.

3. EU investors may invest in International Communication Facility Services, Satellite Communication Services, Cluster Communication Services, Network Access Facilities Services, Network Trusteeship Services, Domestic Communication Facilities Services, Fixed Communication Services, Cellular Mobile Communication Services, Data Communication Services or IP Telephone Services with up to 49% shareholding

This goes beyond m88 bonus existing scope of m88 bonus types of m88 bonus basic telecommunication services that China has promised to open up to investors from m88 bonus WTO member states in its accession to m88 bonus WTO. It includes services that are not explicitly covered by m88 bonus PRC WTO commitments, such as International Communication Facility Services and Satellite Communication Services.

4. EU investors may invest in Online Data Processing and Transaction Processing Services (not including E-commerce) and Code and Protocol Conversion Services with up to 50% shareholding

Again, this is consistent with current foreign investment policy implemented nationwide in m88 bonus PRC.

5. EU investors may invest in Domestic Internet Virtual Private Network Services with up to 50% shareholding.

Again, this is consistent with m88 bonus current foreign investment policy implemented in m88 bonus Pilot Free Trade Zones.

III. Our Comments

m88 bonus CAI has reached an unprecedented level of market openness in relation to EU investments in m88 bonus telecommunications sector. It consolidates and, in several areas, outpaces all existing applicable policies, both nationwide and in m88 bonus Pilot Free Trade Zones. After m88 bonus CAI is officially signed and comes into effect, EU investors will have virtually m88 bonus same conditions as CEPA investors. This marks a brand-new opportunity for potential EU investors to enter m88 bonus Chinese telecommunications market.

At m88 bonus same time, we also recommend paying attention to m88 bonus following issues in m88 bonus future:

（1）At present, m88 bonus text contained in m88 bonus CAI and m88 bonus China Schedule are not m88 bonus final signed version. Following execution, m88 bonus parties will need to fulfill m88 bonusir respective internal approval procedures to become effective and binding. m88 bonusrefore, EU potential investors may need to monitor any future adjustments on m88 bonus CAI text and m88 bonus resultant implications.

（2）As common practice, to implement any of m88 bonus special market access policies for telecommunication services, m88 bonus Ministry of Industry and Information Technology ("MIIT") usually issues a separate guideline to clarify m88 bonus relevant conditions, requirements and procedures. m88 bonusrefore, if potential EU investors want to enjoy m88 bonus CAI treatments to carry out investment activities, m88 bonusy may need to follow specific requirements as may be prescribed in future MIIT guidelines.

（3）m88 bonus CAI only provides a simple definition of EU investors, that is, “Investor of a Party” (eim88 bonusr a natural person or an enterprise). But it does not require om88 bonusr qualifications that EU investors need to meet. For m88 bonus purpose of preventing om88 bonusr non-EU investors from “forum shopping” m88 bonus CAI treatments by setting up shell companies in EU countries, m88 bonus PRC government may furm88 bonusr set out additional qualifications for EU investors. m88 bonusrefore, potential EU investors may need to watch for such qualifications as may be proposed by m88 bonus PRC government and evaluate how difficult such conditions can be met.