The People’s Republic of China has, for a long time now, been the most hostile regime in the world when it comes to VPNs operating in China and the citizens of China using them.

But the recent crackdowns on VPNs by the Chinese Communist Regime and its leader Xi Jinping have contributed in no small part to the economic crisis China now finds itself in.

Many foreign companies, which were dependent on VPNs to get around the Great Firewall and communicate freely with their colleagues outside China as well as access factually accurate information as opposed to state propaganda.

This is perhaps why the Chinese Communist Party (CCP) has, somewhat unexpectedly, announced plans to increase both the number of VPNs permitted in the country and the amount of these services that are allowed to be owned by foreign companies.

What do the new CCP guidelines say?

In a set of new guidelines, published on Sunday 13th September, the CCP announced 24 different measures designed to try and boost foreign investment in the country. They plan to set up new research and development centres and, with a straight face, have even said they plan to boost intellectual property protections.

But it is the VPN announcements that have raised the most eyebrows. The CCP guidelines include plans to “steadily and safely” increase VPN services in the country and allow foreign ownership of up to 50 per cent in each provider, moving beyond existing pilot programmes in a number of cities such as Beijing.

Two years ago, the CCP began to allow foreign investment in Chinese VPNs, with the maximum investment capped at 50% of the overall business. Without announcing whether this pilot had been a success or not, the CCP is now rolling this out nationwide.

This might seem as if China is loosening its vice-like grip on the internet in China and is actually feeling confident enough in itself to allow the people of China to access information freely rather than being exposed solely to CCP propaganda.

But, as with so much in China, all is not what it first seems.

China’s VPN crackdown

Regular readers may recall that VPNs are technically illegal in China, with jail sentences for selling unapproved VPNs not uncommon and most premium VPNs blocked (or at least attempted to be blocked) across the country.

In November 2021, the Cyberspace Administration of China announced that “no individual or organisation” could provide “programmes, tools, routes or services, including internet access, server hosting, technical support, promotion, app downloads, or payment and settlement” for “penetrating and bypassing the cross-border data security gateway.”

The only VPNs that are permitted in China are the ones that are based in China and keep all their data on Chinese servers. This is because the law requires these VPNs to log all their user activity and hand it over to the CCP when asked to do so.

Most international VPNs refuse to do this, and most international companies have refused to use these Chinese domestic VPNs since they allow the CCP to see the content of everything they do online. Many have chosen to leave China altogether rather than comply with the rules.

These new guidelines are clearly intended to settle international nerves and try to lure some of these businesses back.

But they would be fools to do so because, while the window dressing has been smartened up, the core rules still remain the same. The only VPNs you can use in China are Chinese VPNs, and they are more dangerous than not using one at all.

Our advice for companies and individuals using VPNs in China

If you need to use a VPN to run your business and don’t want the CCP to get wind of your most intimate details, you cannot now do business in China.

The new guidelines do also beg the question, which international companies are looking to invest in these Chinese VPNs and why? If they know anything about this sector at all, they will know what a sham they are.

Our advice to companies considering working out of China with a VPN is clear. If you can’t use a premium international VPN you can trust, don’t do anything in China you don’t want the CCP to know about and don’t mind Chinese companies stealing and copying.

And for individuals, the rule remains the same too. Lots of premium VPNs do still work in China, but they also come with risks if you are caught using them. So, take care, and it is good practice to carry a burner phone with you without a VPN in case you get stopped and searched by the CCP regime.

Prison in China is not nice, and you have no guarantee of ever getting out. Using a VPN makes this a distinct possibility, so if you are using one, be sure to take precautions. To find out more, read our guide on the Best VPN for China.