The WTO and the Telecommunications Sector in China

Extract

A Brief History

In terms of growth and revenue, China's telecommunications sector is arguably the jewel in the crown of the socialist market economy. What was formerly the Ministry of Post and Telecommunications (MPT), and is presently the Ministry of Information Industries (MII), has throughout the 1990s produced phenomenal revenue and phenomenal growth.For useful studies on China's telecommunications industry development, see John Ure (ed.), Telecommunications in Asia: Policy, Planning and Development (Hong Kong: Hong Kong University Press, 1995); Milton Mueller and Zixiang Tan, China in the Information Age: Telecommunications and the Dilmenas of Reform (Center for Strategic Studies, 1997), and most recently, focusing on equipment manufacture rather than the service sector, Xiaobai Shen, The Chinese Road to High Technology: A Study of Telecommunications Switching Technology in the Economic Transition (New York: St. Martin's Press, 1999). Beginning with Deng Xiaoping's historic trip to Shenzhen in March 1992, China's reform-minded leadership recognized the importance of telecommunications infrastructure to the success of urgent economic growth. Revenue growth for the MPT was strong throughout the decade, growing over 1,600 per cent. Postal services did well, but the phenomenal growth was in telecoms. From 1991 to 1999, telecommunications revenue grew 2,050 per cent against total postal service growth of 375 per cent. In 1999, combined turnover for post and telecoms reached 331.1 billion yuan (US$40 billion), of which telecommunications activity contributed 311.2 billion yuan, or 94 per cent (see Figure 1). As a result, the Ministry became increasingly focused on the telecommunications sector.