Chinese Telecom Industry Essay -- essays research papers fc

December 11, 2001 was a long awaited day for both local businesses, as well as for foreign investors. It was the day that the Chinese State Council promulgated the Regulations for the Administration of Foreign Invested Telecommunications Enterprises (FITE) which were scheduled to come into effect on the 1st of January 2002. Since it’s accession to the WTO, foreign telecommunications have eyed what is arguably the largest telecommunication’s industry in the world, and growing at a rate of over 20 per cent per annum. Having said that, Bureaucratic influences have stunted what were once crucial and foreseeable changes in regulation, the effect being cushioned only by government investment into the industry. â€Å"We encourage more investment into the telecommunications sector as we are moving into a critical stage since the industry is deepening its reform and telecom equipment is upgrading†, says Xi Guohua of the Ministry of Information Industry (MII). However, although this quote quite accurately reflects the attitude of the Chinese Government with regard to foreign investment, stringent regulation is a hurdle which is still making it difficult for foreign firms to penetrate the market. As of October 2004, 10 out of the meagre 12 applications made by foreign firms to provide telecom-related services have been pending approval for over 12 months . Along with these characteristic delays in Government approval (often blamed on red tape-ism) come the problems of stringent regulation...