China's telecommunications manufacturing sector, influenced by extensive reforms in the telecom service structure, is expected to suffer a sharp decline in both market demand and corporate profits this year, the Business Weekly reported.

　 The telecom industry completed a fixed-asset investment of 55.3 billion yuan (6.66 billion US dollars) during the first eight months of this year, the report quoted minister of Information Industry Wu Jichuan as saying.

　 Wu estimated that total investment this year could reach 120 billion yuan (14.46 billion dollars), a decline of 20 percent when compared with last year's 150 billion yuan.

　 The large-scale telecom infrastructure investment of recent years has become a key force in bolstering sales growth for telecom equipment suppliers, especially locally emerging manufacturers which enjoy preferential government support.

　 However, telecom service restructuring, mainly focusing on the break up of China Telecom that began early this year, severely affected the normal development plan of telecom instrasturctural construction.

　 Shenzhen-based Zhongxing Telecom, one of the country's major telecom equipment suppliers, suffered a decrease in the growth of its net-profits of 9.15 percent during the first half of this year, compared with the same period of 1998.

　 Telecom service reforms also hit foreign telecom suppliers, most of which have reported business declines in the Chinese market.

　 Telecom equipment manufacturers have turned to the establishment of China Mobile Telecom Corp,the most profitable arm of China Telecom, in hopes of finding profits.