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Regulatory and Policy Developments in Asia

By , | May 14, 2014

      On Jan. 6, 2014 the Ministry of Industry and Information Technology of the PRC (MIIT) and the People’s Government of Shanghai jointly released the “Opinions regarding Further Opening up Value-added Telecom Service Sector towards Foreign Investments in China (Shanghai) Pilot Free Trade Zone.” The document clarified some earlier policies in respect to the value-added telecom sector in the Free Trade Zone (FTZ).

      According to the “Telecom Services Catalog” promulgated by MIIT on Feb. 21, 2003, value-added telecom services in China are classified into eight business categories: information service, store-and-forward, online data processing and transaction processing, call center, domestic multi-party communication service, Internet access service, domestic Internet virtual private networks, and Internet data center. According to the opinions, all categories except for Internet data center business are now open for foreign investment in the FTZ.

      Among the seven opened-up categories, three had already been opened up for foreign investment as part of China’s earlier WTO commitments and four categories are now newly opened up in the FTZ. Also, the shareholding ratio requirements for foreign investors in certain categories are either removed or loosened in the FTZ. Foreign investors are now allowed to establish a 100 percent foreign-owned company in the FTZ for information service, store-and-forward, call center, domestic multi-party communication service, and Internet access service businesses.

      The opinions require that foreign invested companies must be legally established in the FTZ, with their service facilities also located in the FTZ. Except for Internet access service, which can only be provided within the FTZ, the other six types of value-added telecom services can be provided nationwide.


      Shanghai FTZ opened several media & entertainment business

      On Sept. 29, 2013, the Ministry of Culture of the PRC promulgated the “Circular on Implementation of Administration Policies of Cultural Market in China (Shanghai) Pilot FreeTrade Zone,” which provides the setting up procedures of Foreign Invested Enterprises (FIE) in the media and entertainment industry and also allows for the manufacturing and sales of gaming devices.

      According to the “Guideline Catalogue Of Industries For Foreign Investment” issued in 2011, Chinese partners should control the operation of performance venues and performance brokerage companies. The operation of entertainment venues is required to only be in the form of a joint venture (JV). The general scheme and circular has cancelled the equity ratio restrictions for the operation of performance venues, performance brokerage companies and entertainment venues. Foreign investors can establish an equity or cooperative JV, or a wholly foreign owned enterprise (WFOE) in these three business areas in the Shanghai FTZ and provide services for the Shanghai market. The circular has also simplified the approval procedures for the above FIEs.

      In 2006, the Ministry of Culture, in association with MIIT and other authorities, released “The Opinion on Special Administration of Operational Sites of Electronic Games,” stipulating a comprehensive prohibition on the manufacture and sales of electronic gaming equipment and its components in China. The general scheme and the circular cancelled the prohibition and allows FIEs to manufacture and sell gaming devices in the Shanghai FTZ. Those FIEs shall file application for content-based examination to the cultural authority and file a record at the Ministry of Culture after approval is received. The cultural authority should decide such approval within 20 days after acceptance of application. Gaming devices that have passed the content-based examinations of the cultural authority can be sold in the domestic market.

      According to the Chinese government, the Shanghai FTZ will open more areas gradually and become a more accessible environment to foreign investors. The Chinese government is also assessing other regions such as Tianjin, and may apply similar measures in these regions to attract foreign investment.

      Japan’s Basic Plan

      On Feb 28, 2014, the Japanese H 2A rocket was launched with the high-tech NASA-JAXA Global Precipitation Measurement (GPM) Core Observatory on board. The spacecraft is designed to collect data from several other satellites in orbit and add its own measurements to build up a detailed picture of global rainfall that will assist meteorologists forecast weather events such as hurricanes, blizzards, droughts and landslides.

      The satellite is designed for a three-and-a-half-year mission, taking it up to close to the end of the five-year plan set out in the Japanese Basic Plan on Space Policy of January 2013.

      The basic plan has three “priority subjects:” national security and disaster management, industrial development, and space science, which the GPM falls under. All budget proposals must follow this basic plan and seek to maintain and improve scientific and technological capabilities and Japan’s industrial base.

      Coordinated by the cabinet office, the objective is that the Japanese space industry be capable of responding to space development in the Asian and other emerging markets and break away from the current over-dependence on governmental funding and demands.

      Asia-Pacific Telecommunity (APT) – Views on WRC-15

      The next meeting of the APT Conference Preparatory Group for WRC-15 will be held in June 2014 in Brisbane, Australia. In its preliminary views on the WRC-15 agenda, some of the items that the APT supports are:

      • TU studies into new applications using the AIS and enhanced maritime radiocommunications in the maritime mobile service

      • ITU studies on the possible new allocations to the fixed-satellite service (FSS) in the frequency bands 7 150-7 250 MHz (space-to-Earth) and 8 400-8 500 MHz (Earth-to-space), ensuring sharing and compatibility with existing services

      • ITU studies for possible new allocations of maritime-mobile satellite service (MMSS) in the 7/8 GHz bands, ensuring compatibility with existing services and their future development in these bands

      • The view that the frequency requirements for the 22-26 GHz band should be identified for the potential MSS allocation taking into account current allocations for MSS above 19 GHz

      • The study to examine the procedures for notifying nano- and picosatellites, taking into account their unique characteristics, while ensuring the protection of existing allocated services and radio stations.

      These views will be updated at the June meeting, and in two further meetings before the WRC-15 in November 2015. VS


      Joanne Wheeler is a partner in the Technology, Media and Telecommunications at the international law firm CMS.

      Sam Yang is a senior associate at CMS Beijing. He has more than 10 years of experience and advises on regulatory matters and a wide range of corporate and commercial transactions.

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