The 2015 Foreign Investment Industrial Guidance Catalogue explicitly prohibits foreign investment in internet publishing, including online gaming (Art. 2), thereby designating this digital content sector as off-limits to foreign capital.

According to Art. 6 of the Provisions on Administration of Foreign-Invested Telecommunications Enterprises and Section VII of the Negative List 2021, 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 49% 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 of the Provisions on Administration of Foreign-Invested Telecommunications Enterprises, 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) 2021, 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.

China’s national security review regime is primarily governed by the Measures on National Security Review of Foreign Investment (NSR Measures), issued on 19 December 2020 by the National Development and Reform Commission (NDRC) and MOFCOM. The NSR Measures build on earlier regulations, including the Circular of the General Office of the State Council on the Establishment of Security Review System Regarding Merger and Acquisition of Domestic Enterprises by Foreign Investors (2011 Circular) and the Measures for the National Security Review of Foreign Investment Pilot Free Trade Zones from the State Council General Office (Free Trade Zone Circular), which technically remain effective but have been rarely applied in practice.
The NSR Measures outline detailed rules for the national security review framework, managed by a Working Mechanism led by the NDRC and MOFCOM. The process consists of two stages: a General Review to assess whether a transaction requires further scrutiny, and a Special Review for a more in-depth assessment if potential national security risks are identified. According to Art. 4 of the Measures, the regime applies to foreign investments that: (i) involve control over enterprises in key sectors, such as critical infrastructure, technology, energy, and information services; or (ii) impact national security through equity acquisitions, asset purchases, or greenfield investments.
Furthermore, "control" is defined broadly, encompassing scenarios where foreign investors hold more than 50% equity, exert significant influence over operations or decision-making, or control key aspects of the business. It is reported that the NSR regime introduces clearer procedures compared to previous rules, it remains opaque regarding timelines, procedural details, and decision outcomes.

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

According to Art. 59 of the National Security Law of the People's Republic of China, the State shall establish comprehensive systems and mechanisms for national security review and oversight. These systems shall encompass the review of foreign commercial investments, special items and technologies, internet information technology products and services, projects related to national security, and other significant activities or matters that impact or could impact national security. Art. 60 provides that central state organs shall conduct national security reviews, issue opinions, and supervise enforcement in accordance with legal and administrative regulations. Moreover, Art. 61 mandates that provinces, autonomous regions, and directly governed municipalities shall be responsible for national security review and regulation within their administrative regions, ensuring compliance with the law.

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 the revised Art. 4 of the Rules for the Implementation of the Law of the People's Republic of China on Foreign-capital Enterprises, sectors in which the establishment of foreign-capital enterprise is forbidden or restricted are determined as per the state guidance for foreign investment orientation and guiding catalogue of industries for foreign development. According to Art. 5, an application for the establishment of foreign-funded enterprises will not be approved under one of the following circumstances: (a) detrimental to the sovereignty of China or the public interest of society; (b) endangering China's national security; (c) violation of Chinese laws and regulations; (d) does not meet the requirements of China's national economic development; (e) may cause environmental pollution; (f) may cause environmental pollution.

Telecom business activities in China are divided into Basic Telecom Services (BTS) and Value-added Telecom Services (VATS). BTS refers to the business of providing public network infrastructure, public data transmission and basic voice communications services. VATS refers to the telecom and information services provided through public network infrastructure. Both BTS and VATS operators require a license. VATS licenses are further divided into single-province licenses and cross-provincial licenses. A BTS licence is valid for five or ten years (depending on the type of telecom service involved), and a VATS licence is valid for five years. Telecom operators must meet the minimum registered capital requirements to be granted licences. For BTS operators, the minimum registered capital is RMB 100 million for single-province providers and RMB 1 billion for nationwide providers. For VATS operators, the minimum registered capital is RMB 1 million for single-province providers and RMB 10 million for nationwide providers. It is also reported that the licensing procedures are opaque and arbitrary. As a result, only a few dozen foreign-invested suppliers have secured VATS licenses, while there are thousands of licensed domestic suppliers.
Additionally, foreign companies must obtain VATS licenses only through a joint-venture company. In this regard, the European Chamber of Commerce in China has complained about the multiple value-added service licenses required, suggesting the approval of one single value-added service license that allows for the provision of multiple VATS.

According to Art. 11-13 of the Provisions on Administration of Foreign-Invested Telecommunications Enterprises, investors seeking to establish foreign-invested telecommunications enterprises—whether for basic telecommunications services or value-added services—must submit a project application report. This report should include the names and basic information of the joint venture parties, the total investment in the business, registered capital, each party's capital proportion, the type of business applied for, and the duration of the joint venture.
Additionally, under Art. 14 of the Provisions, the project proposal and feasibility study report must provide a business forecast, development plan, and an analysis of the return on investment. Furthermore, as stated in Art. 3 of the Implementing Rules of the Law of the People's Republic of China on Foreign Capital Enterprises, the establishment of foreign capital enterprises must contribute to the development of China's national economy and demonstrate the potential for significant economic benefits.

According to Art. 6 of the Interim Provisions of the People's Republic of China on the Management of International Networking of Computer Information Networks, computer information networks for direct international networking must use the international channels provided by the national public telecommunications network of the Ministry of Posts and Telecommunications. No unit or individual may establish or use other channels for international networking on their own. The public security authorities may issue a warning and impose a fine of up to RMB 15,000 (USD 2,200) on anyone who violates this provision. In addition, institutions or individuals are not allowed to use the international network to endanger national security, divulge state secrets, infringe upon national, social, and collective interests and the legitimate rights and interests of citizens, or engage in illegal and criminal activities. Institutions and individuals engaged in international networking services are required to file procedures in designated public security agencies within 30 days of the connection and accept the security supervision, inspection, and guidance of the public security authorities; for those who violate the measures, individuals and institutions can be fined in serious cases. The Provisions on Administrative Law Enforcement Procedures for Internet Information Content Management set out the procedural and administrative processes for the Cyberspace Administration of China to enforce the laws and regulations relating to Internet content.

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

Art. 18 of the amended Chinese Patent Law establishes that non-resident foreigners or organisations 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 has been reported that the obstacles to patent enforcement include prolonged delays within the judicial system, a perceived reluctance of the courts to grant preliminary injunctions, burdensome invalidity proceedings, stringent evidentiary requirements, and uncertainty regarding whether a patentee's right to exclude encompasses manufacturing for export.

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

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: the use of a published work for the purposes of the user's own private study, research or self-entertainment; and the use of a published work, within proper scope, by a State organ for the purpose of fulfilling its official duties; among others.