The Development Of Telecommunications In China And Its Impact On The Economy

Since the1990s, the development of China’s telecom industry is remarkable all over the world, the total number of fixed telephone and mobile phone users exceeded1.1billion as of the end of2010. As the basic industry of national economy, how is China’s telecommunications industry in the development of time and space, and what its impact on the economy is? This paper talks about these two aspects trough quantitative analysis.First of all, we conduct a longitudinal analysis. From the factor analysis on the development of China’s telecommunications industry of eight years from2003to2010, we get the factor scores and sort the scores. Factor scores and the first factor score is increasing year by year, showing steady upward trend and the overall level continuous improvement. From the2008, the trend of the second factor (fixed telephone factor) is declining unusually. Because of the financial crisis in2008, the volume of business has fluctuated, in addition, because of the rapid development of mobile phones and the internet, the fixed telephone market has been badly hit in recent years.Then, we conduct a Horizontal analysis, from the factor analysis of China’s31provinces and cities in the year2010,we know that provinces with the highest overall score are Guangdong, Jiangsu and Zhejiang, which are located at the southeast coastal areas and the economic is developed.Telecommunications is great demanded in this provinces, and the comprehensive strength of telecommunications industry is very strong. The relative ranking of the provinces are Qinghai, Ningxia, Tibet, which are located in the western inland areas. Beijing, Shanghai, Tianjin has high scores of the second factor (level of service factor), which is ranked in the first three. It implies that level of telecommunications services in these three places is very high.Finally, through the panel data analysis, we study the impact of the telecommunications industry on the economic on the various provinces and municipalities in China. The results show that there is a cointegration relationship between the telecommunications industry and economic development growth, and with a significantly positively relationship. The growth of telecommunications business will improve GDP,and there are differences in different provinces.