USTR Says China Hasn’t Reformed Telecom Enough Since WTO
Telecom regulation remains a problem in China, despite other reforms since it joined the World Trade Organization in 2001, the U.S. Trade Representatives said Mon. in its annual report to Congress. Problems exist in intellectual property rights (IPR), price controls, opaque regulatory procedures, reclassification of some value-added telecom services as basic, new Chinese technology standards, which are becoming barriers to entry, and other areas, the USTR said.
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China is developing its own standards for such things as DTV, “despite the existence of well-established international standards, as a means for protecting domestic companies,” the USTR said. Unique standards also are being developed for telecom gear, RFID, Internet protocols, wireless local area networks, audio and video coding and other technologies, it said. “This strategy has the potential to create significant barriers to entry into China’s market,” the report said. It cited “continuing interference in commercial negotiations over royalty payments” for IPR for 3G, and pursuit of unique national standards in other technology areas “that could lead to the extraction of technology or intellectual property from foreign right holders.”
China continues to frustrate efforts by U.S. providers of telecom and other services to achieve full market potential in China, thanks to an opaque regulatory process, burdensome licensing and operating requirements and other hurdles, the report said. Some telecom services come under price controls, and companies voice concerns over duplicate certification requirements for radio and telecom equipment. “Five years after its accession to the WTO, China has not yet established a truly independent regulator in the telecommunications sector,” the report said.
“U.S. exports continued to benefit from China’s participation in the Information Technology Agreement (ITA),” requiring removal of tariffs on computers, semiconductors and other IT products, the report said, but a problem area is an April 2003 reclassification of “several telecom services from the value-added category to the basic category.” The move brought limiting access to China’s telecom market because basic services are on a slower schedule for liberalization, the report said.
Meanwhile, enormous opportunities exist for Hong Kong’s telecom sector, according to a quadrennial trade review of HKSAR released Wed. by the WTO. The U.S. looks “forward to Hong Kong, China’s, withdrawal of its interconnection policy for local fixed-line telecommunications services by June 30, 2008, which will allow the negotiation of interconnection charges between the operators concerned,” said Peter Allgeier, U.S. permanent representative to the WTO.
In June, telecom accounted for 1.8% of Hong Kong’s gross domestic product and employed about 20,000, the report said. It has 3.8 million phone lines -- 55 per 100 inhabitants. Mobile service subscribers number 8.7 million, for 124.7% penetration. Hong Kong has 186 licensed ISPs and 2.6 million Internet subscribers; 1.67 million are broadband. There are 11 local fixed telecom network services licensees.