Blueprint for China's post-WTO Telecom Competition Framework

Foreign investment has been banned in telecommunications since 1993 despite later ill-advised attempts by foreign entities to circumvent the ban through participation in Chinese-Chinese-Foreign (zhong-zhong-wai)² structures in the 1990s.

In entering WTO, China has agreed to implement pro-competitive regulatory principles embodied in the WTO Basic Telecommunications Agreement reached in Geneva in February 1997 by 69 countries. With WTO accession, China will permit 50% foreign equity share participation for value-added services (including e-mail, voicemail, internet access, online information and database retrieval and value-added facsimile services) two years after accession, 49% foreign equity share for mobile voice and data services (including all analogue, digital, cellular and personal communications services) five years after accession, and domestic and international services (including voice, fax and data) six years after accession. Geographic restrictions will be eliminated for paging and value-added services two years after accession, for mobile voice and data services in five years, and for domestic and international services in six years.³ China's Ministry of Information Industy⁴ is now expected to issue its Final Administrative Regulations on Foreign-invested Telecommunications Enterprises in mid-December 2001.⁵

A Tsunami of Mergers and Acquisitions Involving Foreign Players