The City of Beijing plans to allow foreign investors to invest in VPN services in a rare move by the Chinese government. China's Great Firewall has strict controls over the country's Internet service providers, causing wide scale Internet censorship.
Beijing is planning to allow for a trial zone for VPN services by the end of the year.
China's softening on VPN services is an attempt to lure in foreign investment. The Beijing Municipal Bureau of Commerce will cap foreign ownership in VPN providers at 50 percent. State Council approved the measure in January to allow for foreign-invested companies in Beijing to be able to access sites that are blocked by the Great Firewall of China.
Beijing's service sector has slowed, causing the city to take action after the sector caused the city's economy to slow to 6.3 percent in the first six months of the year. The municipal government views VPN services as a way for greater investment in the city and can help foreign firms that already rely on VPN services to access 135 of the top 1,000 sites in the world.
The municipal government will also start welcoming foreign investment in audio and video programs as well as online games. Audio and video remain a gray area in China due to strict laws that ban foreign investment in audio, video, publishing and online news in the country. China has been known to jail citizens for years for sharing VPN information.
All games and services that will allow foreign investment in the city will have to meet Chinese data security standards.
The shift to allow VPN access in the country shows a softening of China's stance on foreign investment. Authorities, in the past, have taken action against individuals and companies that offered VPN services in China. Many economists view the relaxation of VPN policies as a welcomed measure and change that demonstrates China's commitment to globalization.
Beijing has also unveiled a three-year plan that will open up the municipal government's services sector. The plan was unveiled after fiscal revenue in the first half of 2019 fell 2.5 percent to 317 billion yuan.
Chinese Internet users will have access to YouTube, Facebook, Twitter and Google. The relaxation of current policies will still allow the government to have content oversight and ensure that data meets security standards.
Critics suggest that China's attempt to soften VPN restrictions is a farce and will normalize state-controlled VPN services, which currently monitor what users are doing online.
