China govt calls for private telecom investment

Robert Clark | May 17, 2010

telecomasia.net

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China’s State Council has called for private investment in the telecom and other infrastructure sectors – but don’t expect private telcos to be hanging out their shingles just yet.

The council, China’s highest government body, issued an opinion paper calling for private capital to be “encouraged” into telecom, power utilities, water resources, defense technologies and city government enterprises that have been until now been reserved for state-owned companies.

It is first time the government has ever said it would consider private investment in telecom infrastructure, CCID reported.

However, the paper said that private capital in telecom infrastructure sector be restricted to equity participation only.

The paper, written by the State Council research department and approved at a meeting on March 24, also called for more private investment in value-added services, referring to content, applications and intelligent network services.

An editorial in the 21^st Century Business Herald said that in order to bring private companies into industries dominated by the state, the government needed to “set boundaries between the government and the market and… to establish a modern economic management system to serve the market.”

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Robert Clark