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China’s New Telecommunications Regulatory Framework
Jan 2, 2001

The Peoples Republic of China adopted a new regulatory framework, Guowuling 291, in 25 September 2000. According to Linklaters and Alliance, a consulting and lawyer firm with offices throughout Asia, the new regulatory framework is more transparent and competitive and a step towards future liberalization of telecommunications in China. Although foreign investment in telecommunications services remains banned by the Foreign Investment Industrial Guidance Catalogue effective since 1 January 1998, the new regulatory framework sets the field for future investors in the sector. The Ministry of Information Industry exercises authority to regulate the industry and issue licenses, but the statute fosters independent regulatory powers and increasing competition to curtail unfair practices and abuse of market power that follow the WTO regulatory guidelines. Also in line with WTO agreements, the Chinese telecommunications regulatory framework defines services as voice telephony, value –added and hybrid, but failed to include specific definitions for emerging technologies. Licensing requirements remain cumbersome, but the new statute establishes specific application procedures, deadlines and requires reasoned refusals to grant licenses. The new regulatory framework also issues new guidelines for pricing and quality of service

The US-China WTO Accession Treaty signed in 15 November 1999 includes the deregulation of foreign investment in telecommunications and the gradual liberalization of basic telecommunications services and value-added services. The agreement also addresses the issues of interconnection with major suppliers, competitive safeguards, the public availability of licensing criteria, procedures for the allocation and use of scarce spectrum resources, and independent industry regulation. The EU-China Accession Treaty of 19 May 2000 managed to accelerate liberalization of mobile telephony, but failed to secure nondiscriminatory treatment to foreign investors in the sector, which may not exercise majority ownership.

Source: Linklaters &Alliance. Bulletin. “The new PRC Telecommunications Regulations: a first step towards a more level playing field.” November 2000.
The report is available from the Library Section at SItrends.org.

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