Beijing, Shanghai, Shenzhen and Hainan province launched a pilot project on Wednesday to further open up value-added telecommunication services to the outside world.

The three cities and one province will allow the use of foreign capital to operate telecom services such as internet data centers, thus helping stimulate market competition, and allowing China to share its digital development opportunities with other countries.

The telecom industry is an important sector to attract foreign investment, as its high revenue and user scale rank among the top in the world, and China's digital economy still has huge development potential despite its rapid development over the past years.

China began opening up its telecom market to the outside world after its accession to the World Trade Organization in 2001, and till the end of September this year, the number of foreign-funded enterprises approved to provide telecom services in China had increased to 2,220.

The entry of foreign capital has not only intensified the competition in the country's telecom market but also contributed to its development by introducing new technologies and other resources. Competition and cooperation with foreign companies have prompted domestic telecom companies to take measures to expedite their transformation, and upgrade their technologies and services, thereby helping improve the industry's overall service level and international competitiveness.

China's major domestic telecom operators are today leading global companies in terms of user scale, technology and corporate strength. So the green light to use foreign capital to operate telecom services should not be seen as the entry of a predator in the domestic telecom market.

Among the businesses piloted to lift the restrictions on foreign equity ratios in the three cities and one province are internet data centers and information services, which foreign investors have already set their eyes on.

Opening up these services to foreign capital is conducive to attracting more technologies and other resources, which will help build a solid computing power base, and promote innovation in advanced technologies, such as artificial intelligence and big data, and the merging of the digital economy and the real economy.

ECONOMIC DAILY