Market Studies
China Telecom 2000 Vol. 1: China Telecom Policy, Infrastructure and Market Overview (Updated September 1997)
China Telecom 2000 Vol. 1: China Telecom Policy, Infrastructure and Market Overview (Updated September 1997)

Published: May 1997

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China's telecommunications network has become the second largest in the world after the United States. By August 1997, the PSTN central office switching capacity in China has topped 100 million lines. Teledensity has reached 7.3 percent nationwide, while urban teledensity exceeded 25 percent. There are now almost 11 million cellular subscribers in China. Behind this tremendous growth is the large amount of investment in telecom by the Chinese government. In 1996 alone, the MPT invested US$12.48 billion in post and telecom fixed assets.

According to MPT's 9th Five-Year Plan, China will invest a cumulative US$60 billion in post and telecommunications during 1996-2000. With China gradually deregulating the telecom sector, this offers great opportunities for foreign telecom equipment manufacturers, network operators, and investors.

This report on China Telecom Policy, Infrastructure and Market Overview provides a detailed analysis on China's telecom development, market structure and policy, with coverage of both the public and private networks. It outlines the future development plans of the MPT, China Unicom and various provincial PTAs. The report offers quantitative forecasts of how the telecom markets, especially the switching, cellular and paging markets will develop till the year 2000 and beyond. Foreign firms doing business in China are profiled and a detailed contact list is provided to help prospective firms to enter the Chinese market.

In this report, IGI forecasts that the PSTN capacity will reach 180 million lines by the year 2000, and China will then have over 120 million telephone subscribers, of which almost 30 million are cellular subscribers. There will be 115 million paging subscribers, and telephone penetration rate will exceed 10 percent in China.


E 1.0 Introduction
E 2.0 Telecom Investment Plans
E 2.1 Objectives for 1997
E 2.2 The 9th Five-Year Plan (1996-2000)
E 3.0 Structure of China's Telecom Sector
E 4.0 Switching Markets
E 5.0 Wireless Markets

1.1 Purposes of This Report
1.2 Scope of This Report
1.3 Plan of This Report
1.4 Methodology of This Report

2.1 Demographics
2.1.1 Western China
2.1.2 Northeastern China
2.1.3 Northern China
2.1.4 Southern China
2.1.5 Southwestern China
2.1.6 Population
2.1.7 Distribution of Wealth
2.2 Political and Economic Reforms
2.3 Foreign Trade and Investment
2.3.1 Foreign Trade
2.3.2 Foreign Investment

3.1 Overview
3.2 The State Council
3.3 Commissions and Ministries
3.3.1 The State Planning Commission (SPC)
3.3.2 The State Science and Technology Commission (SSTC)
3.3.3 The Ministry of Posts and Telecommunications (MPT) Organization Functions of the MPT The Directorate General of Telecommunications (DGT) China National Posts and Telecommunications Industry Corporation (PTIC) China National Postal and Telecommunications Appliances Corp. (PTAC) China National Communications Construction Corporation (CNCCC) China Communications and Broadcasting Satellites Corporation (ChinaSat )
3.3.4 The Ministry of Electronics Industry (MEI)
3.3.5 The Ministry of Foreign Trade and Economic Cooperation (MOFTEC)
3.4 Provincial and Local PTAs
3.5 China Unicom
3.5.1 Founding Organizations
3.5.2 New Leadership Team
3.5.3 Business Development
3.5.4 Foreign Cooperation
3.5.5 Future Objectives

4.1 Telecom Policy and Reform
4.2 Competition and the Second Network
4.3 Decentralization
4.4 New Trends in Financing
4.5 The Planning Process
4.5.1 Fundamental Plan
4.5.2 Development Plan
4.5.3 Annual Investment Plan
4.5.4 Project Plans
4.5.5 Project Implementation

5.1 Brief History
5.2 Recent Development and the 9th Five-Year Plan (1996-2000)
5.2.1 Objectives for 1997
5.2.2 The 9th Five-Year Plan (1996-2000)
5.3 Network Overview
5.3.1 Public Switched Telephone Network (PSTN) Traffic and Subscriber Growth Telecom Revenue Telecom Investment
5.3.2 Local Networks
5.3.3 Rural Networks
5.3.4 Data Networks Public Switched Packet Data Network (PSPDN) or ChinaPac Digital Data Networks (DDN) ChinaNet The Golden Projects
Golden Bridge
Golden Gate (Customs)
Golden Card
Golden Tax
Golden Agriculture
Golden Macro
Golden Intelligence/ CERNET
Golden Health
Golden Sea Private (Non-MPT) Networks
Railway Telecom Network
Future Plans
Ministry of Power Communications Network
Future Plans
China National Financial Communications Network
Earthquake Monitoring and Forecasting Communication Network
Future Plans
Space Industry Corporation's Communication Network
Future Plans
Meteorology Communications Network
5.3.5 Public Switching Systems (See Chapter 6)
5.3.6 Cellular Networks (See Chapter 7)
5.3.7 Transmission Systems Open Wire Coaxial Cable Microwave Radio Telecommunications Digital Optical Fiber Links
The National Fiber Optic Cable Network
Asia-Europe Fiber Optic Cable Trunk Line
Submarine Fiber Optic Cables
China-Japan Cable
China-Korea Cable
China Southeast Asia Cable
China-US Cable Network
Research and Production
Optical cable industry
5.3.8 Satellite Communications Introduction Recent Development Demand for Satellite Communications Equipment Manufacturing Very Small Aperture Terminal (VSAT) Markets
Market Overview
VSAT Service Providers
VSAT Service Providers in China
VSAT Equipment Suppliers
Major Foreign and Domestic VSAT System Suppliers
Future Prospects
5.3.9 Terminal and Customer Premises Equipment

6.1 Introduction
6.2 CO Exchanges Market
6.2.1 Capacity Growth
6.2.2 Demand Forecast
6.2.3 The Changes in Market Share of Foreign Firms
6.2.4 Switch Joint Ventures Alcatel Siemens NEC AT&T (Lucent) Nortel Ericsson
6.2.5 Domestic Manufacturers Great Dragon Telecommunications (GDT) Group Golden Roc Electronic Information Machine (EIM-601) Co. Ltd. (Group) Shenzhen Huawei Technology Co. Ltd. Shenzhen Zhongxing New Telecom Equipment Co. Ltd. Weifang Huaguang Electronic (Group) Co. Ltd. Xi'an Datang Telecom Ltd.
6.2.6 Supply and Demand
6.3 PBX Market
6.3.1 Market Overview
6.3.2 Demand Forecast

7.1 Characteristics of Wireless Communications Market
7.1.1 Market Drivers for Wireless Communications
7.2 Cellular Market
7.2.1 Overview
7.2.2 Network Operators MPT China Unicom CESEC/MPT (Great Wall)
7.2.3 Cellular Market Regulation and Standards Regulatory Structure of the Cellular Market
The State Radio Regulatory Commission (SRRC) The Battle for Radio Frequency Spectrum The People's Liberation Army (PLA) and Commercial Mobile Services Frequency Allocations Cellular Standards and Technology Network Regulation and Type Approval New Provisions on Radio Transmission Equipment Imports
7.2.4 Cellular Equipment Endusers and Suppliers MPT and Provincial PTAs China Unicom The Military / Great Wall Mobile Other Ministries
7.2.5 The Forecast Of Future Cellular Market Growth Introduction MPT Development Plans Unicom Development Plans Cellular Markets Growth Forecast
MPT Networks
China Unicom Networks
Great Wall Networks
7.2.6 Other Wireless Communications Markets CT-2 Trunked Mobile Radio Systems Emerging Wireless Technologies
Spectrum Allocation & Management for New Wireless Systems
Field Trials Satellite Mobile Communications Wireless Local Loop (WLL)
7.3 The Radio Paging Market
7.3.1 Overview
7.3.2 Market Structure
7.3.3 The Equipment Market
7.3.4 Market Trend
7.3.5 Growth Forecast

8.1 Introduction
8.2 New Technologies


10.1 Chinese Government Contacts
10.2 Telecom Equipment Manufacturers and End users
10.3 Trade Publications


Figure E.1 GNP Growth Vs. P&T Growth, 1980-96
Figure E.2 Central Office Exchanges in China, 1980-1996
Figure E.3 The Number of Toll Circuits in China, 1980-1996
Figure E.4 MPT Cellular Market Development, 1990-1996
Figure E.5 Teledensities in China, 1980-1996
Figure E.6 Toll Fiber Optic Cables in China, 1990-1996
Figure E.7 P&T Fixed Assets Investment in China, 1986-1996
Figure E.8 MPT Organizational Structure
Figure E.9 DGT Organizational Structure
Figure E.10 Organizational Structure of China Unicom
Figure E.11 Forecast PSTN Network Switching Capacity: 1997-200
Figure E.12 Forecast of MPT Cellular Subscriber Growth: 1997-2000
Figure 2.1 Western China
Figure 2.2 Northeastern China
Figure 2.3 Northern China
Figure 2.4 Southern China
Figure 2.5 Southwestern China
Figure 3.1 Division and Overlapping of Functions in the Telecom Sector
Figure 3.3 DGT Organizational Structure
Figure 3.4 Telecom Organization at the Provincial and local Level
Figure 3.5 Typical Provincial P&T Administration
Figure 3.6 Organizational Structure of China Unicom
Figure 4.1 Planning and Implementation of a Typical Project
Figure 5.1 GNP Growth Vs. P&T Growth: 1980-96
Figure 5.2 Central Office Exchanges in China, 1980-1996
Figure 5.3 The Number of Toll Circuits in China, 1980-1996
Figure 5.4 Toll Switching Capacities in China, 1980-1996
Figure 5.5 Teledensities in China, 1980-1996
Figure 5.6 Teledensities by Provinces in China, 1996
Figure 5.7 Toll Fiber Optic Cables in China, 1990-1996
Figure 5.8 Digital Microwave Circuits in China, 1990-1996
Figure 5.9 Local Telephone Subscribers in China, 1980-1996
Figure 5.10 Telecom Services Turnover in China, 1991-1996
Figure 5.11 P&T Fixed Assets Investment in China, 1986-1996
Figure 5.12 China's Microwave Communications Networks, 1996
Figure 5.13 China's National Fiber Optic Backbone Network, 1996
Figure 5.14 Trans-Southeast Asia Fiber Optic Cable Network
Figure 5.15 US- China Cable Network)
Figure 5.16 China's Satellite Network, 1996
Figure 6.1 Capacity of Central Office Exchanges, 1980-1996
Figure 6.2 Forecast PSTN Network Switching Capacity: 1997-2000
Figure 6.3 Switching Market Share of Major Suppliers (End of August 1995)
Figure 6.4 The Rise and Fall of Major Switching Equipment Suppliers
Figure 6.5 Location of Major Joint Ventures in Central Office Exchanges Production
Figure 6.6 The PBX Market Growth Forecast
Figure 7.1 MPT Cellular Market Development, 1990-1996.
Figure 7.2 MPT Mobile Network Subscriber Growth: 1991-1996
Figure 7.3 China Telecom Great Wall Mobile Network
Figure 7.4 The Organizational Structure of State Radio Regulatory Commission
Figure 7.5 Frequency Allocation..
Figure 7.6 Forecast of MPT Cellular Subscriber Growth: 1997-2000
Figure 7.7 CDMA Trial Networks in China
Figure 7.8 MPT-Operated Paging Market Development: 1990-1996
Figure 7.9 Forecast of Total Paging Market Growth, 1997-2000


Table 2.1 Western China: Provincial Statistics
Table 2.2 Northeastern China: Provincial Statistics
Table 2.3 Northern China: Provincial Statistics
Table 2.4 Southern China: Provincial Statistics
Table 2.5 Southwestern China: Provincial Statistics
Table 4.1 Division of Diversified Financing by Network Type
Table 5.1 China National and Provincial P&T Fixed Assets Investment in 1995
Table 5.2 China National and Provincial Long Distance Switching, Fiber Optics and Microwave Transmission Statistics (end of 1995)
Table 5.3 China National and Provincial Central Office Switching Capacity (end of 1995)
Table 5.4 China National and Provincial Mobile and Wireline Telephone Statistics (end of 1995)
Table 5.5 The 9th Five-Year Plan of Selected Provinces
Table 6.1 Large Capacity Central Office Switch Joint Ventures
Table 6.2 New Chinese Indigenous Central Office Switches
Table 6.3 Switching Market Segments, Players, and Competition in China
Table 7.1 Paging Subscribers in the MPT Networks