China Opens Way for Foreign Investment into VPNs in Beijing

Published · Oct 27, 2021

China’s cabinet signed off on a policy change to allow Beijing to invite foreign investment into virtual private network (VPN) services. Investors from other countries can now own up to 50% of VPN services in the region.

The State Council announced the policy change this month. The update also raises the foreign investment cap on information services for app stores at Zhongguancun Science Park. People refer to the Park as “Beijing’s Silicon Valley.” Foreign investors will also be able to buy into internet connection services in designated zones.

The South China Morning Post first reported on the move, pointing out that it comes after a period of tightening the restrictions on various tech industries in China.

The State Council clarified that the program is in the pilot stage.  As such, they can adjust allowances as they see fit.

VPNs in China

In some countries, VPNs are legal to use and offered to the general public. In fact, in any given month, 25% of internet users surf the Web with a VPN. For instance, people commonly use VPN services to beat geo-blockers and stream content from different regions.

In China, their use is restricted—people need special permission to get one. The government reserves VPN services for the use of its workers and authorized businesses.

China keeps its cyberspace largely separate from the rest of the world.

The barrier segmenting it is known as the Great Firewall. Getting through the Firewall undetected is not an easy task. Many people judge VPN providers based on their ability to surpass it.

However, those using unauthorized VPNs in China can face penalties.

For that reason, it’s curious that the country is opening up investment into this technology. Still, this is part of a broader plan to encourage investment, coinciding with the decline in China’s economic growth.

It remains to be seen how the foreign investment will play out. After all, the government has reserved the right to adjust allowances as it sees fit.

Garan van Rensburg
Garan van Rensburg

Garan is a writer interested in how tech reshapes the environment, and how the environment reshapes tech. You'll usually find him inoculating against future shock and arguing with bots.