Liberalization & Deregulation

Internet Diffusion

Electronic Commerce

Hardware Manufacturing

Software Development 

Who uses IT?

IT Labor Market

IT Geographics

IT Financing

Government Policies

Legal Environment

Transborder Data Flows 

Analysis: IT Strengths & Weakness

Analysis: Impacts on the Business

Sources and links

Unlike many developing countries looking for the money, technologies, and expertise necessary to quickly update their telecommunication infrastructures, China is maintaining a very conservative approach to bringing in foreign companies: it has no plans to privatize any section of its telecommunication market and continues to ban any foreign equity ownership, operation, or management of its telecommunication sector 7. 

Deregulation: China began the deregulation of telecommunication in 1993. Before 1993, China's telecommunication services, including basic and value-added telecommunication services, were all operated and administrated by Ministry of Post and Telecommunication. Overlapping governmental sectors and the mixture of governmental functions and enterprise functions in China's telecommunication field seriously hindered its telecom development. China Telecom was separated form MPT to operate the telecommunication services. MPT was only handled the policy and strategy. 

China Telecom: China Telecom fell within the jurisdiction of MPT and was the monopoly in telecommunication in China. 

In 1994, China decided to allow certain companies, that do not fall within the jurisdiction of MPT, and certain private investors, to participate in a limited area of value-added telecommunication operations. Two telecommunication companies, China Unicom and Jitong, were established to compete with the China Telecom's monopoly service. 

China Unicom: China Unicom was permitted to engage in some basic telecommunication services, such as long-distance phone, local phone service and value-added telecommunication services 9.

Jitong focused on domestic information service market. It marked that China further introduced a competitive mechanism into its telecommunication service. 

Although China introduced officially competition in the telecommunication several years ago, 95 percent is still owned by the company that used to belong to the former monopolist China Telecom, while domestic competitor China Unicom holds 5 percent 10. 

Until now, foreign telecommunication companies are not allowed to compete in China in Telecommunication service, but on in telecommunication equipment and infrastructure. In order to attract foreign investment and advanced technology, China has adopted a series of policies to encourage foreign investors to compete in its equipment market. 

China's accession to the World Trade Organization will force it to open up further to comply with WTO's stipulation that national telecommunication industries must be deregulated by 2005. China has already promised to license more companies for various services, such as Internet, VoIP and data services 11. 

China already reached the agreements with some main WTO members, such as USA, Japan and Europe to open its telecommunication service market step by step. 
 
 
 

	Deregualtion Status	Comments
Voice	Partially liberalized market	Only few companies are allowed to provide voice services. China Telecom, China Unicom.
Cable	Monopoly	Controlled by Chinese government in different levels.
Television	Monopoly	China has 3,240 television broadcast stations, of which 209 are operated by china Central television, 31 are provincial TV stations and nearly 3,000 are local city stations. Private TV station is forbidden in China.
Radio	Monopoly	Chinese radio broadcast stations, AM 369, FM 259, shortwave 45, are under control of Chinese government in differtent levels. The private ownership of radio broadcast station is not allowed.
Cell	Partially liberalized market	Only few companies are allowed to provide cell services. China Telecom, China Unicom.

Source: www.odci.gov, factbook, China 12