investment in China,[1] numerous challenges remain.[2] China continues to "use discriminatory regulatory processes, informal bans on entry and expansion, case-by-case approvals, overly burdensome licensing and operating requirements, and other means to frustrate the efforts of U.S. suppliers of services to achieve their full market potential in China."[3]
2. China Exerts Control over Domestic Carriers
Not only does China limit foreign investment in the telecommunications industry, but it also controls its state-owned carriers. Prior to 1999, the Chinese government relied on a single carrier, which effectively had a monopoly on all telecom services in China.[4] However, the government chose to break up that monopoly and create a number of smaller, state-owned carriers to spur competition.[5] In 2008, the Chinese government reversed course and launched a series of reforms, which resulted in consolidating the number of carriers in China.[6]
Today, the Chinese telecommunications market is dominated by the "Big Three" carriers: China Mobile, China Telecom, and China Unicom.[7] The Chinese government controls the companies' management and operations.[8] "[M]ost senior executives of the Chinese telecom companies have links to the [Ministry of Information Industry and Technology], the Government, or the [Communist] Party."[9] The Chinese government handpicks the companies' leaders, frequently shuffling senior leadership between the companies, and implements policies discouraging intense competition between the Big Three.[10] In fact, in 2017, the
- ↑ See Karen Sutter, Cong. Research Serv., IN11208, U.S. Signs Phase One Trade Deal with China (2020).
- ↑ Office of the U.S. Trade Representative, Exec. Office of the President, Nat'l Trade Estimate Rep. on Foreign Trade Barriers 116 (2020).
- ↑ Id.
- ↑ James Huddleston, The Battle between China's 3 Telecom Companies and Its Impact on Profits, Seeking Alpha (July 23, 2013), https://seekingalpha.com/article/1565812-the-battle-between-chinas-3-telecom-companies-and-its-impact-on-profits.
- ↑ Id.
- ↑ Yukyung Yeo, Between Owner and Regulator: Governing the Business of China's Telecommunications Service Industry, 200 China Quarterly 1013, 1023–24 (2009), https://www.jstor.org/stable/pdf/27756541.pdf.
- ↑ See Alan Weissberger, China's Big 3 Mobile Operators Have 9 Million 5G Subscribers in Advance of the Service; IEEE Comm. Soc. Tech. Blog (Oct. 7, 2019), https://techblog.comsoc.org/2019/10/07/chinas-big-3-mobile-operators-have-9-million-5g-subscribers-in-advance-of-the-service-barrons-china-to-lead-in-5g-deployments/.
- ↑ See, e.g., Bien Perez, Bosses of China Mobile, Unicom and Telecom Reshuffled as Beijing Revamps State-Owned Telecommunications Firms, South China Morning Post (Aug. 24, 2015).
- ↑ China: Telecom Industry Business Opportunities Handbook 1, 61 (2014).
- ↑ China Telecom Chairman Moves to China Mobile, The Economist Intelligence Unit (Mar. 6, 2019), http://www.eiu.com/industry/article/147729798/china-telecom-chairman-moves-to-china-mobile/2019-03-06; Huddleston, supra note 37.
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