Booming telecom market in China expects further expansion

Aug. 23, 2001
Aug. 23, 2001--China's soaring telecommunication market will continue to expand against the backdrop of the significant telecom market downturn in the US.

China's soaring telecommunication market will continue to expand against the backdrop of the significant telecom market downturn in the US. Backed by booming domestic demand and Beijing's successful bid for the 2008 Olympic Games, China will maintain an annual GDP growth rate of at least 7 percent, according to Chinese government estimates. China's 10th Five-Year Plan calls for the government to spend $151 billion on its telecom infrastructure by 2005 to make it one of the most advanced in the world.

The hot growth areas of China's telecom markets will be highlighted at the upcoming China Telecom 2001 conference, September 5-6, 2001, in Washington DC. Organized by Information Gatekeepers, the conference will focus on the markets of Chinese telecom service providers, emerging carriers, mobile communications, optical networks, submarine fiber optic cables, Internet data centers, voice over IP, and issues related to China's pending accession to the WTO.

"With the current slowdown of the global telecom sector, companies worldwide, particularly those in the US, are looking to find new market opportunities. Those opportunities are in China right now. The Chinese government will spend billions of dollars to upgrade its telecom infrastructure under its official 10th Five-Year Plan (2001-2005), and the Beijing Olympics will stimulate billions of dollars of additional investment into the local networks," says Dr. Hui Pan, Chief Economist, Information Gatekeepers.

According to China's 10th Five-Year Plan, the country will achieve the following targets by the year 2005:

* 220-260 million fixed line telephone users

* 260-290 million mobile phone users

* 150 million cable TV users

* Nationwide telephone penetration exceeding 40%

* Fixed mainline penetration rate reaching 18%

* Mobile phone penetration rate reaching 21%

* Data, multimedia and Internet users reaching 200 million

* Total investment in telecom infrastructure will be 1.25 trillion yuan ($151 billion) during the 10th Five-Year Plan period.

Statistics from China's Ministry of Information Industry show fixed asset investment in the telecom sector in China rose by 93% on an annual basis in the first half this year. But it only accounted for 30% of the total 262.7 billion yuan (US$32 billion) budget for the year.

"Fixed asset investment in the telecom sector will continue to grow at an annual rate of over 30 percent in the next few years," says Dr. Pan. "This robust investment spending will drive up demand for all types of telecom equipment."

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