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Government urged to break monopoly


2001-12-19
China Daily

Chinese Government has been urged to open the State-monopolized sectors of telecommunications, banking and transport to domestic private investors.

The aim is to fortify these industries against fierce challenges they will face from major foreign rivals following China's entry to the World Trade Organization (WTO).

The government has lowered the threshold for foreign investment in the telecom market. It is also encouraging small and medium-sized enterprises (SMEs) to set foot in the value-added telecom market, said Zhang Chunjiang, vice-minister in charge of information industry.

But owing to lack of capital and technology, private enterprises, especially SMEs, find it very difficult to get into the sector.

But the development of IP (Internet Protocol) technology and government pledges to strengthen financial backing of SMEs have raised the enthusiasm of private businesses to get into the telecom operation market.

Experts have urged the country's legislators to revise the Telecoms Law, which was issued in September 2000, since it is already out of date, to guarantee a clear and stable regulatory environment.

They said that time is running out for the telecommunication operation, banking and transport sectors to survive the expected competition as China's WTO agreement offers a transitional period of only three to five years of limited protection of such industries of vital importance to national economic security.

As the world's fastest developing telecom market, China has become a priority target of telecoms carriers throughout the world.

The world's major telecoms carriers have all launched subsidiaries or representative offices in China.

Due to the various market access restrictions, overseas capital so far can only invest in domestic telecom operators in a roundabout way.

But since the country was formally accepted as a member of the trade club last week, varied barriers will be eradicated soon in line with the rules of WTO.

This is likely to lead to an overwhelming flow of overseas investment.

The banking and transport sectors face a similar situation. But it is still unclear whether and when domestic private businesses will get access to these sectors.

The government is facing an urgent decision on curbing monopolies, fostering competition and giving opportunities to domestic private enterprises in these sectors as soon as possible, said experts.

Granting market access to domestic private investors will help the country speed up reforms of these industries and help the country get better prepared to turn the challenges into development opportunities.

 
 
     
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