The Ministry of Industry and Information Technology (MIIT) has just issued a pronouncement stating that foreign investors will, in an exception from existing rules, be allowed to own 100% of companies engaging in e-commerce. Here's a post from the China Accounting Blog, which suggests that this offers an escape route for VIEs. (I think the post is incorrect in stating that the relaxation is limited to the Shanghai Free Trade Zone; the relevant language says, "On the basis of experimentation in the Shanghai Free Trade Zone, [MIIT] has decided to relax on a nationwide basis [the restriction on foreign ownership]" (我部决定在中国（上海）自由贸易试验区开展试点的基础上，在全国范围内放开在线数据处理与交易处理业务（经营类电子商务）的外资股比限制).)

I want to raise a different question: what authority does the MIIT have to relax this requirement? According to the MIIT's notice, the requirement seems to come from a State Council regulation, the "Rules on the Administration of Foreign Investment in Telecommunications Enterprises" (商投资电信企业管理规定). Or perhaps it can be found in the Guidance Catalogue for Foreign Investment, issued jointly by the National Development and Reform Commission and the Ministry of Commerce. As for the first, the MIIT has no authority to override a State Council regulation. As for the second, approval of foreign investment must come from the NDRC and the MOC, so if they aren't on board with this rule, the MIIT can't make them get on board. It's hard to believe we'd see this notice if other relevant ministries weren't on board. But if they are on board, why isn't this notice jointly issued with their signatures under it as well?

[UPDATE JUNE 22: Apparently it's not an exception to existing rules. The latest version of the Guidance Catalogue seems by implication to allow 100% ownership of e-commerce ventures - see Item 20 under "Restricted Industries" here.]