Asia Pacific Watch

December 5, 2002
Chinese minister feels telecom will be stronger post-recession

Hong Kong -- “I believe that telecom will emerge from the ongoing recession,” said Wu Jichuan, minister, ministry of Information Industry, China, while delivering the keynote address at the joint forum opening session of the ITU Telecom Asia 2002, which kicked off in Hong Kong on December 2.

Stating some reasons for the current recession, the minister said, “The turbulence in telecom has some deep-rooted problems.” For instance, a huge market bubble led to exaggerated expectations for multimedia services. There were also cases of policy mistakes elsewhere, especially in terms of 3G licensing.

Wu noted, “Telecom is becoming the main driver for China’s social economic development.” He highlighted recent achievements of the Chinese telecom industry.

• The total number of fixed and mobile users had exceeded 400 million
• The teledensity had increased to 31.9 percent
• The total number of Internet users had exceeded 45 million
  

He said that in a recent meeting of the CPC, it was decided that the nation would try and quadruple its GDP – from the current $800 million to $3,200 million by the year 2020. By that time, the total number of fixed and mobile users in China is expected to exceed over 500 million and the teledensity to grow well over 40 percent.

The minister said a lot of changes had taken place over the last two years in the telecom industry in Asia, in China and in the world. “Telecom is currently facing its hardest time in the last ten years and also facing new challenges and opportunities,” Wu said. “The Chinese telecom industry has been impacted to some extent, but we have managed to maintain a momentum – a growth rate of 15 percent since 2001.”

Stating reasons why China has so far remained unaffected by the recession, Wu said the growth has been largely due to pragmatic and prudent policies. The Chinese government has also refrained from joining the hype in technologies. Wu added: “We also adhere to policies that suitable for Chinese conditions. We have adhered to a regulatory system with Chinese characteristics. We have also not introduced completely unrestricted competition, and hence, have not committed mistakes made in other countries. We are also strongly against duplicated construction, while introducing competition in the market.”

The minister called for developing technologies that suit the industry’s needs. He said, “Technologies are still evolving, markets are still expanding and services are still developing.”