Author: Lo, Shuen
Title: The relationship between institutional liberalization and rapid development of China's telecommunications industry since the late 1970s
Degree: M.Sc.
Year: 2000
Subject: Telecommunication -- China
Hong Kong Polytechnic University -- Dissertations
Department: Multi-disciplinary Studies
Department of Business Studies
Pages: 115 leaves : ill. ; 30 cm
Language: English
Abstract: Since the late 1970s, the telecommunications industry in China has developed at a very fast pace. Radical changes have taken place in the orientation of the industry, its institutional system and the domestic market. In the 1980s market reform was introduced in China and as a result the Chinese telecommunications industry was transformed from being merely the political tool and means of national defense of the government to a civilian industry serving the interests of national economic development. Administrative function of the government was separated from the business management and investment authority in the industry was decentralized to local government bureaus. The rapid growth of the industry in this period could be explained by the advantages of scale economy and the benefits from the decentralization of the investment and management of the government monopoly system. The liberalization in the equipment market was also a factor. However, the development of scale economy in the industry could be severely restricted if the government monopoly system would not be changed. The liberalization reform in the 1990s created in the first stage a duopoly in the basic services of telephony, with the agents being already transformed from government departments to independently managed state-owned enterprises, and a relatively improved competitive environment. China had then been able to expand its new mobile telephony through cuts in tariff level and quick adoption of advanced technology. The industry since then had shown an exponential growth in terms of both the number of long-distance calls and the societal telephone penetration or teledensity. China has in a very short span of time become the second largest pager market and the third largest cellular phone market in the world, despite the slow progress in institutional liberalization. With the Chinese accession to the WTO, the Chinese industry is destined to speed up its liberalization reform. Continued growth of the industry, in particular in the technologically more sensitive cellular phone market, is therefore expected.

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