China eases ownership rules for foreign firms

China has relaxed access for foreign investors to its booming telecoms industry by cutting minimum required investments, but retained a ban on foreign majority ownership of ventures.

An Associated Press report said the government's decision could help to attract new investment into an industry that is undergoing a sweeping government-mandated restructuring aimed at boosting competition.

The minimum capital required for a foreign-financed company to offer national-level or local basic services was cut by 50%, according to a notice on the web site of China's Cabinet.

But the Cabinet retained a restriction limiting foreign investors to owning no more than 49% of a company offering basic services and 50% for value-added services, the Associated Press report said.

The change could help new, small Chinese businesses by giving them easier access to foreign financing, increasing competition and speeding innovation.

It also cuts minimum required capital for a foreign-financed company offering basic services at a national level.

The industry overhaul, announced in May, is meant to revive competition by rearranging state-owned phone companies into three large groups, each with mobile and fixed-lined operations.