government stated that it intended to factor in "social obligations" when selecting senior management for the Big Three carriers.[1]
The Chinese government also retains ultimate control over the carriers by setting target returns and growth rates.[2] State-owned carriers are subject to "national service," which compels them to put the government's development goals ahead of the companies' own market interests.[3] In 2017, for example, Li Keqiang, Premier of the Chinese Government, "directed China Mobile, China Unicom and China Telecom to remove all domestic long-distance and mobile roaming fees by the end of [the] year, significantly cut internet connection and leased line charges for small and medium-sized enterprises . . . and reduce international long-distance tariffs."[4] All three companies pledged to do so within 24 hours of the Premier's directive, despite noting that doing so would negatively impact their financial performance.[5]
3. China Encourages State-Owned Telecommunications Carriers to Expand Internationally
Although strictly regulating the domestic telecommunications industry, the Chinese government has also sought to take advantage of more open international markets. China formally announced a "Go Out" policy or "Going Global" strategy in 1999 to encourage state-owned enterprises to invest and expand overseas.[6] The Chinese government pledged financial support to companies in strategic industries to encourage expansion into global markets.[7] "The essence of the 'going global' strategy [was] to promote 'the international operations of capable Chinese firms with a view to improving resource allocation and enhancing their international competitiveness.'"[8] Other commentators noted that the underlying motive of the policy was to bolster "[Communist] Party claims to legitimacy by becoming an effective global actor."[9] Chinese telecom companies have benefited from this policy,
- ↑ Bien Perez, Why Government Policy has a Bigger Impact on China's Telecoms Industry than Market Competition, South China Morning Post (Mar. 11, 2017).
- ↑ Id.
- ↑ Id.
- ↑ Id.
- ↑ Id.
- ↑ See generally Nargiza Salidjanova, U.S.-China Econ. & Sec. Review Comm'n, Going Out: An Overview of China's Outward Foreign Direct Inv. (Mar. 30, 2011).
- ↑ See Hongying Wang, A Deeper Look at China's "Going Out" Policy, Centre for Int'l Governance Innovation (Mar. 8, 2016); Nargiza Salidjanova, U.S.-China Econ. & Sec. Review Comm'n, Going Out: An Overview of China's Outward Foreign Direct Inv. 5 (Mar. 30, 2011) (citing United Nations Conference on Trade & Dev., World Inv. Report (2006)).
- ↑ Nargiza Salidjanova, U.S.-China Econ. & Sec. Review Comm'n, Going Out: An Overview of China's Outward Foreign Direct Inv. 5 (Mar. 30, 2011) (citing United Nations Conference on Trade & Dev., World Inv. Report (2006)).
- ↑ China Policy, China Going Global: Between Ambition and Capacity 3 (Apr. 2017), https://policycn.com/wp-content/uploads/2017/05/2017-Chinas-going-global-strategy.pdf.
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