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Review of the Development and Reform of the Telecommunications Sector in China”, OECD Digital Economy Papers, No Please cite this paper as: OECD (2003-03-13), “Review of the Development and Reform of the Telecommunications Sector in China”, OECD Digital Economy Papers, No. 69, OECD Publishing, Paris. http://dx.doi.org/10.1787/233204728762 OECD Digital Economy Papers No. 69 Review of the Development and Reform of the Telecommunications Sector in China OECD Unclassified DSTI/ICCP(2002)6/FINAL Organisation de Coopération et de Développement Economiques Organisation for Economic Co-operation and Development 13-Mar-2003 ___________________________________________________________________________________________ English text only DIRECTORATE FOR SCIENCE, TECHNOLOGY AND INDUSTRY COMMITTEE FOR INFORMATION, COMPUTER AND COMMUNICATIONS POLICY Unclassified DSTI/ICCP(2002)6/FINAL REVIEW OF THE DEVELOPMENT AND REFORM OF THE TELECOMMUNICATIONS SECTOR IN CHINA text only English JT00140818 Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format DSTI/ICCP(2002)6/FINAL FOREWORD The purpose of this report is to provide an overview of telecommunications development in China and to examine telecommunication policy developments and reform. The initial draft was examined by the Committee for Information, Computer and Communications Policy in March 2002. The report benefited from discussions with officials of the Chinese Ministry of Information Industry and several telecommunication service providers. The report was prepared by the Korea Information Society Development Institute (KISDI) under the direction of Dr. Inuk Chung. Mr. Dimitri Ypsilanti from the OECD Secretariat participated in the project. The report benefited from funding provided mainly by the Swedish government. KISDI also helped in the financing of the report. The report is published on the responsibility of the Secretary-General of the OECD. Copyright OECD, 2003 Applications for permission to reproduce or translate all or part of this material should be made to: Head of Publications Service, OECD, 2 rue André-Pascal, 75775 Paris Cedex 16, France. 2 DSTI/ICCP(2002)6/FINAL TABLE OF CONTENTS CHAPTER 1: THE CHINESE TELECOMMUNICATIONS SECTOR ................................................ 6 1.1. Achievements and goals ................................................................................................................... 6 1.2. General features of the telecommunication markets......................................................................... 7 1.3. The regulatory regime....................................................................................................................... 8 CHAPTER 2: THE INFORMATION AND TELECOMMUNICATIONS REGULATORY REGIME............................................................................................................................ 11 2.1. Regulatory institutions and regime ................................................................................................. 11 2.1.1. Overview................................................................................................................................... 11 2.1.2. Ministry of Information Industry.............................................................................................. 12 2.1.3. The State Council...................................................................................................................... 13 2.1.4. The State Development Planning Commission ........................................................................ 13 2.2. Telecommunications regulations .................................................................................................... 13 2.2.1. Background to the Telecommunications Decree ...................................................................... 14 2.2.2. Four basic principles of the Telecommunications Decree ........................................................ 14 2.2.3. The Telecommunications Decree ............................................................................................. 15 CHAPTER 3: THE CHINESE TELECOMMUNICATIONS MARKET............................................. 19 3.1. Structure of the telecommunications market .................................................................................. 19 3.1.1. Overview................................................................................................................................... 19 3.1.2 The break-up of the old China Telecom ...................................................................................21 3.2. Fixed-line telephony ....................................................................................................................... 22 3.2.1. The local call market................................................................................................................. 22 3.2.2. Long-distance market .................................................................................................................. 22 3.2.3. Regional disparities in fixed-line service..................................................................................... 23 3.3. Wireless paging service .................................................................................................................. 26 3.4. IP telephony .................................................................................................................................... 27 3.4.1. Overview................................................................................................................................... 27 3.4.2. IP telephony service market...................................................................................................... 27 3.4.3. Future prospects and tasks ........................................................................................................ 29 3.5. Mobile telephony ............................................................................................................................ 30 3.5.1. Overview of the mobile telephony market in China................................................................. 30 3.5.2. Geographical distribution of mobile telephone subscribers...................................................... 32 3.5.3. Mobile telephony service providers.......................................................................................... 33 3.5.4. Demographic characteristics of Chinese mobile subscribers.................................................... 37 3.6. Internet and data transmission ........................................................................................................ 40 3.6.1. The structure and performance of the market ........................................................................... 40 3.6.2. Infrastructure development ....................................................................................................... 45 3.7. Prospects for convergence in the IT sector..................................................................................... 47 3 DSTI/ICCP(2002)6/FINAL CHAPTER 4: THE INFORMATION TECHNOLOGY EQUIPMENT INDUSTRY IN CHINA ..... 49 4.1. Overview......................................................................................................................................... 49 4.2. The network equipment manufacturing market.............................................................................. 52 4.2.1. Overview................................................................................................................................... 52 4.2.2. Future prospects........................................................................................................................ 53 4.3. The mobile equipment market ........................................................................................................ 54 4.3.1. Market shares of mobile handset manufacturers....................................................................... 54 4.3.2. Market share of the mobile network equipment .......................................................................... 54 4.4. The IP telephony equipment market............................................................................................... 55 4.5. Government policies in support of technological advancement ..................................................... 56 4.5.1. Localisation policy on IT equipment in China.......................................................................... 56 CHAPTER 5: GOVERNMENT POLICIES FOR THE CHINESE TELECOMMUNICATIONS SECTOR ................................................................................................... 58 5.1. Overview......................................................................................................................................... 58 5.2. Major targets of China’s Tenth Five-year Plan for the IT sector.................................................... 58 5.2.1. Telecommunications industry as a driving force for economic growth.................................... 58 5.2.2. Building the telecommunications infrastructure....................................................................... 58 5.2.3. Establishment of research centres............................................................................................. 59 5.2.4. The IT infrastructure................................................................................................................. 59 5.2.5. The State management system of providers ............................................................................
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