Market Performance of Chinese Telecommunications: New Regulatory Policies

The structure, conduct, and performance of Chinese telecommunications are analyzed to determine reform's impact on policy objectives. Recent performance suggests that a more comprehensive reform is needed. However, China's fragmented policy environment makes large-scale reform difficult. Further deregulation of the telecommunication industry requires several related initiatives: reduction of entry barriers (to obtain multiple centers of initiative), creation of a universal service fund (to defuse stakeholder concerns regarding access), and formation of a cross-sector antitrust regulatory agency (with a special interest in promoting competition where feasible). While these policies could further complicate decision making in a fragmented institutional environment, each initiative is directed at neutralizing powerful stakeholders who can block or delay reform. The authors thank two anonymous referees for helpful suggestions. Thoughtful comments were also provided by David Sappington, Mark Jamison, and Clare Pu. The co-authors take full responsibility for any remaining gaps in the analysis.