China Telecom Corporation Limited (China Telecom), the incumbent, is a wholly State-owned enterprise (SOE) providing basic, mobile and value added telecommunication services.

It is reported that China does not mandate functional or accounting separation for operators with significant market power (SMP) in the telecom market.

According to Art. 6 of the Provisions on Administration of Foreign-Invested Telecommunications Enterprises, for foreign-funded telecommunications enterprises operating value-added telecommunications services (including online database storing and searching; electronic data exchange; online data processing and transactions processing; domestic multiparty communication services; IP-VPN; ISP; ICP and video teleconferencing), the proportion of foreign investors' capital contribution in the enterprise shall not exceed 50% in the end. An exception applies to e-commerce, for which 100% foreign equity and ownership is allowed. Furthermore, the proportion of capital contribution between Chinese investors and foreign investors in foreign-invested telecommunications enterprises in different periods shall be determined by the industry and information technology department of the State Council in accordance with relevant regulations.
In addition, according to Art. 5, if the enterprise is engaged in the value-added telecom business within a province, autonomous region, or municipality directly under the Central Government, it shall have a registered capital of not less than 1 million yuan (Approx. USD 137,000). However, if an enterprise is engaged in value-added telecom businesses nationwide or beyond a single province, autonomous region or municipality directly under the Central Government, it shall have a registered capital of not less than 10 million (Approx. USD 1,370,000).
According to Art. 2, a foreign-invested telecommunications enterprise refers to an enterprise operating telecommunications business jointly invested and established by foreign investors and Chinese investors in the form of Sino-foreign joint ventures in accordance with the law within the territory of the People's Republic of China.

According to Art. 6 of the Provisions on Administration of Foreign-Invested Telecommunications Enterprises, the capital contribution ratio of foreign investors in foreign-funded telecommunications enterprises operating basic telecommunications services (excluding wireless paging services) shall not exceed 49% in the end. However, in practice, all telecommunication companies are Chinese. In addition, the proportion of capital contribution between Chinese investors and foreign investors in foreign-invested telecommunications enterprises in different periods shall be determined by the industry and information technology department of the State Council in accordance with relevant regulations.
In addition, according to Art. 5, if the enterprise is engaged in the basic telecom business within a province, autonomous region, or municipality directly under the Central Government, it shall have a registered capital of not less than 100 million yuan (Approx. USD 14,000,000). However, if the enterprise is engaged in the basic telecom business nationwide or beyond a single province, autonomous region, or municipality directly under the Central Government, it shall have a registered capital of not less than 1 billion yuan (Approx. USD 140,000,000).
Under the Special Management Measures for Foreign Investment Access (Negative List) 2020, authorities must treat foreign investors with the same degree of accommodation as domestic investors unless set out otherwise in the negative list. While no caps have been set out in the negative list with regard to basic telecommunication services, the negative list provides that the basic telecommunication business must be controlled by the Chinese party.

It is reported that there is an obligation for passive infrastructure sharing in China to deliver telecom services to end users, and it is practiced in the mobile sector and in the fixed sector based on commercial agreements.

According to Art. 25 of the Chinese government’s 2015 National Security Law, all information systems in China must be "secure and controllable". It is reported that every company operating in China – whether domestic or foreign – is required to provide the Chinese government with access to its source code, encryption keys, and backdoor access to their computer networks in China.

China lacks a comprehensive framework in place that provides effective protection of trade secrets, but there are limited measures addressing some issues related to them namely: Anti-Unfair Competition Law (revised in 2019); the Civil Code (effective in 2021), the Civil Procedure Law (revised in 2017); the Labour Law (revised in 2018); and the Criminal Law (revised in 2015). According to the Anti-Unfair Competition Law: trade secrets refer to any technical information, operational information or commercial information, which is not known to the public and has commercial value, and for which its infringer adopted measures to ensure its confidentiality.
In addition, it is reported that stakeholders have welcomed the latest revision of the Criminal Law and the continuing implementation of previously issued judicial interpretations as positive developments. In particular, stakeholders noted stronger procedural protections for right holders and broader definitions of misappropriation.

China has ratified the World Intellectual Property Organization (WIPO) Copyright Treaty.

China has ratified the World Intellectual Property Organization (WIPO) Performances and Phonograms Treaty.

China has a copyright regime under the Copyright Law of the People's Republic of China. However, the exceptions do not follow the fair use or fair dealing model, therefore limiting the lawful use of copyrighted work by others. Art. 22 lists the exceptions, which include use of a published work for the purposes of the user's own private study, research or self-entertainment;use of a published work, within proper scope, by a State organ for the purpose of fulfilling its official duties; among others.

It is reported that China has high levels of online piracy and lacks effective enforcement. Moreover, China continues to be the largest origin economy for counterfeit and pirated goods, accounting (together with Hong Kong) for more than 85% of global seizures of counterfeit goods from 2017 to 2019. In addition, it is reported that the rate of unlicensed software installation in the country was 66% in 2017 (above the 57% rate of the Asian Pacific countries), for an estimated commercial value of USD 6,842 million.

China is a party to the Patent Cooperation Treaty (PCT).

Art. 18 of the amended Chinese Patent Law establishes that non-resident foreigners or organizations without business establishments in China shall entrust the patent agency established by law to handle patent applications or other patent-related matters in China. Moreover, according to Art. 19, any entity or individual intending to file a patent application in a foreign country for an invention or utility model completed in China shall submit a request for confidential examination to the patent administration department under the State Council in advance. The patent administration department of the State Council shall handle international patent applications in accordance with the relevant international treaties to which the People's Republic of China is a party, this Law and the relevant provisions of the State Council.

It is reported that in China it is often difficult to provide evidence to support a specific claim for damage compensation in a patent enforcement action. The amount of damages was capped in a range going from a minimum of RMB10,000 (USD 1,450) to RMB 1,000,000 (about USD 145,000), which are not considered to be adequate. The first draft of the amendment to the Patent Law proposed an increase of the range to RMB 100,000-RMB 5,000,000 (USD 15,000 - USD 750,000) However, the second reading of the draft amendments under scrutiny, has changed this, setting only an upper ceiling of RMB 5,000,000 (USD 750,000) and eliminating the minimum amount.
The amendment also introduces certain changes regarding evidence of illicit profit of the defendant, The new draft amendment provides that, in order to determine the amount for compensation, where the right holder has endeavored to present evidence and the related account books or materials are mainly in control by the accused infringer, the People’s Court may order the defendant to provide those books and materials relating to the infringing conduct. If the defendant does not provide or provides false account books or materials, the People’s Court may refer to the right holder’s claims and evidence to rule on the amount of compensation. This will aid foreign right holders in patent enforcement actions.

All foreign companies starting a business in e-commerce activities (including through an e-commerce platform in China) must have a Chinese business license. In order to acquire a business license in China, foreigners must establish a Wholly Foreign Owned Entity (WFOE).