Telecommunications Policy in China: A Two-tier Bargaining Model

Telecommunications has become one of the anointed ‘pillar industries’ of China’s economic reform program. That this policy emphasis has been successful was illustrated in 1993 when the governor of Hebei, officiating at an opening ceremony, remarked that the “old wisdom” that China’s provinces would get rich by building roads first and then putting in telephones no longer applied. The reverse had become true, he suggested, with the key to economic growth being the installation of phone lines.2 Telecommunications policy success has also been demonstrated through the fastest, largest telecommunications build-out program the world has seen. Yet despite this and despite a development program which touches upon almost every other major industry sector – from agriculture to finance and banking; from education to aerospace3 – very little scholarly work has yet been done in coming to terms with the policy processes of the industry. This is surprising given the studies that exist on almost all other high-growth sectors in China. It is also surprising given the scholarly interest the telecommunications industry has generated elsewhere in the world, as it has been seen as an increasingly fundamental aspect of the world trading system.4 This paper is an initial attempt to begin to fill the vacuum.



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