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Telecom Competition, Chinese Style
Investors have long had a dream about the domestic telecom market,
where all firms can compete freely and legally. The reality is that
foreign firms will not be allowed to compete freely for some time,
WTO or no WTO. Draft telecom regulations limit the required domestic
partners to China Mobile,
China Telecom, and China Unicom and none of
them wants to play.
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News
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Now it turns out domestic firms have little interest in competing
legally. We reported earlier that Unicom was providing local services
without approval from the Ministry of Information Industry.
There have also been repeated stories of provincial service providers
actually coming to blows over violations of operational boundaries.
The 800-pound gorilla in illegal activities, and the market as whole,
is Telecom. In some areas it is offering wireless service using its
fixed-line network, at far less than the cost charged by Mobile or
Unicom. Telecom has already established enough network capacity to
absorb 10 percent of cellular demand, even though it does not have a
license to do so. A license is expected this year and Telecom could
very well control the cellular market soon. The break-up of
monopolist Telecom was to herald a new era. Two years later, the
situation is eerily familiar.
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China
E-Bytes
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| Fixed asset investment climbed 14.8 percent in July, versus 12.1
percent from January through June. Combining public investment and
normal budget expenditure, the state is on course to spend about $340
billion this year, in a $1.1 trillion economy. |
| A progress report on government restructuring shows 600,000 people
formerly working under the direct control of the State Council now
work in legally separate enterprises. This doesn't mean, of course,
that they are actually private employees, but it's a step in the right
direction. |
| The Asian Development Bank approved a $300 million loan to help
build a $2.8 billion railway network linking four central provinces. |
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| Keep
up with the fast changing business environment in
China, the world's biggest and fastest-growing emerging
economy. Sinomania! recommends Orbis
Publications, Experts in Emerging Markets, for
a full range of in-depth coverage on China including
daily/weekly/monthly reports and more. |
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