Competition In The Telecommunications Industry And Foreign Investment Of China's Telecom Industry

Since its peak in March 2000, the global telecom market capitalization has fallen by a staggering $2.9 trillion - a drop of over 75%. While some signs of recovery in the telecom sector are emerging, growth prospects remain uncertain and market expectations of telecom earnings potential remains the lowest of all industry sectors. In view of the important role of the telecommunication industry to the healthy growth of economy, whether the competition is to blame for the current crisis and what China's telecommunications should do in the global market is main issues in this paper. Focusing on China's telecommunications overseas investment, this paper first reviews the major theoretical positions regarding the competitiveness of the telecommunication industry. Theoretical analysis indicts that the production curve has changed during these years theological development, which result in the competitiveness of the once monopolized industry. The relevance of theory and global practice confirms the competitiveness of the telecommunication industry. The paper then discusses how the World Trade Organization promotes the global competition. The opening-door regulations are the gambling and chess result between the governments, which tends to result in a dynamic balance to satisfy the desires of development and the protection of indigenous industry. Hence, latent barriers is involved in the governor's commitments. The paper lays out these barriers to facilitate the oversea investment. Understanding the interaction among competition and development of the industry, Chinese government formulates its policy and regulations towards anti-monopoly and opening-door preparation. China's entry to WTO gives indigenous operators a chance to invest overseas and grow into real global telecom service providers. Based on the analysis on competitive edges of existing operators, necessity and possibility of foreign investment, this paper proposes a dynamic way of foreign direct investment, that enriches the current way of investment.