Minister on Ruling Foreign Fund in Nation's Telecom

Rules to regulate foreign fund in China's telecom are to be released without fail prior to Telecom Law and China's WTO entry, says Wu Jichuan, minister of the Information Industry. The draft rules, after examination and revising by relevant departments, have been submitted to the State Council for approval.

There will be no pilot joint venture (JV) undertakings to develop in China's telecom industry before such rules are issued, and unified management will be exercised over foreign investors' entry after China acquires WTO membership. Shanghai Xintian, is the first JV by Shanghai Telecom and AT&T that has been under consideration in the last few years and no other new pilot JV undertaking is to be projected.

When asked about the time of publicizing China's Telecom Law, Wu says it still needs a lot of ground work, since rules regulating China's telecom administration were issued not long ago, not to say new rules still under deliberation to regulate China's telecom are far from being complete. Telecom Law is important in every country and it even takes the developed countries three to four years to get it well revised. China may not need such a long time to publicize its Telecom Law. Preparatory work has been under way and related departments are considering accelerating the process.

When it comes to adjustments of telecom charges, Wu says it is normal in a market economy. Last time's stock drop of China Mobile and China Unicom was caused by share ruling in the name of price adjustment, that is, one-way charging, rather than adjustments made. A fact is that stock price has been declining by a big margin without any rumor on fee adjustment, he said.

To adjust telecom fee we must consider and try to achieve a balance among the interests of the State, enterprises and individual consumers. He further explains that China's telephone coverage has reached over 20 percent with GDP per capita standing only at US$800-odd, much lower than countries with the same coverage. Therefore when adjusting telecom fees we should take account of consumers' income gaps and consumption capability.

Commenting on the impact on China's IT industry by Nasdaq slump, Wu says it can help get rid of bubbles in dotcoms stock and therefore facilitate China's Internet development. China's dotcoms should first consider improving their performance and economic returns should they want to be listed, otherwise nothing can be expected, Wu warns.

By PD Online staff member Li Heng

People's Daily Online ---