China will open up some telecom and internet services to foreign ownership.
Five areas, including call centres and home internet access, will be open to full foreign ownership, the state-owned Xinhua news agency has said.
Firms providing online data and analysis services will have a cap of 55% foreign ownership.
Foreign companies looking to offer these services will have to base their infrastructure in the Shanghai free trade zone, Xinhua said.
However, overseas firms will be allowed to offer services across the country, the Xinhua news agency quoted Wen Ku, head of the telecom development department as saying.
The only exception is home internet access, with foreign-owned firms allowed to offer the service only to consumers within the free trade zone.
The Shanghai free trade zone was launched in September last year as part of efforts by China to open up parts of the economy.
Policymakers said at the time of the launch that restrictions on foreign investment will be eased inside the area.
The move is seen as an attempt by policymakers to spur a fresh wave of economic growth.
Earlier this week, the government said that it would allow foreign firms to make video games consoles within the free trade zone and sell them in China.
However, it said the consoles will have to be inspected by cultural departments before being sold.
Within the Shanghai zone the government is experimenting with free trade in the Chinese currency and allowing interest rates to be set by market forces.