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China

China's WTO Entry Gives Boost to Telecom Reform

Strategic Insights

— 1 min read

China's entry into the World Trade Organization (WTO) has accelerated the country's reform of the telecommunications industry, with the government promising to allow foreign investors to hold even bigger shares in the sector. According to Wu Jichuan, the minister of information industry, China has promised to meet the requirements of WTO member countries, which allow foreign investors to hold 20-40 percent of the shares in their telecommunications sector. Wu noted that China is still a developing country and can hardly meet requirements that are too high for its reality, but the government is committed to reform.

Key Takeaways:

  • China's entry into the WTO has given an impetus to the country's ongoing reform of the telecommunications industry, with the government promising to allow foreign investors to hold bigger shares in the sector.
  • China has promised to meet the requirements of WTO member countries, which allow foreign investors to hold 20-40 percent of the shares in their telecommunications sector.
  • The country has already met the requirements determined in the Sino-U.S. agreement, with foreign investors holding 25 percent of the share capital of China Telecom (Hong Kong).
  • China's government is committed to reform, despite being a developing country and facing challenges in meeting high regulatory requirements.
  • The country's telecom industry has already seen significant reform, with China Telecom restructuring its mobile communications business in 1997 to set up an independent company listed in Hong Kong and New York stock exchanges.

Statistics:

  • 20-40 percent: the percentage of shares in the telecommunications sector that foreign investors are allowed to hold in some WTO member countries.
  • 25 percent: the percentage of share capital of China Telecom (Hong Kong) held by foreign investors.
  • 1997: the year in which China Telecom restructured its mobile communications business to set up an independent company listed in Hong Kong and New York stock exchanges.
  • Two: the number of years in which China met the requirements determined in the Sino-U.S. agreement as early as.

Sources:

  • Caijing, the latest monthly edition of Securities Market Weekly
  • Wu Jichuan, minister of information industry
  • China Telecom (Hong Kong)
  • COMTEX (http://www.comtexnews.com)

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