By Wang Rui and Ge Yibo King & Wood Mallesons M&A Group

1.  Introduction

China’s (Shanghai) Pilot Free Trade Zone (“FTZ”) has attracted global media attention ever since it was established in September 2013. This can largely be attributed to the new FTZ rules that relax restrictions on foreign investment in China’s markets. In particular, the value-added telecommunication services (“VATS”) sector in the FTZ opens up foreign investment in two main ways: (1) lifts bans on foreign investment in foreign invested telecom enterprises (“FITE”) in certain service areas, e.g., in information services (only applicable to application stores); and (2) opens up four new types of VATS services previously closed to foreign investment (i.e., call center services, internet access services, domestic multi-party communication services, and domestic internet VPN services). In mid-April of 2014, the government further issued detailed procedures and guidelines on the establishment of FITEs in the FTZ. This Article aims to provide an update of these new developments in the FTZ.   
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