The International Handbook of Telecommunications Economics, Volume III
Edited by Gary Madden
Chapter 19: China leaps into the millennium
19. China leaps into the millennium Meheroo Jussawalla INTRODUCTION Mao’s Revolution liberated China from imperialism and foreign domination. Deng Xiaoping brought order after the Cultural Revolution and opened the Chinese economy to trade and paved the way for prosperity. Consequently, China accumulated a large balance of payments surplus, exports increasing at a rate of 52 per cent per annum (p.a.) and foreign capital inﬂows rising to USD220 billion p.a. Growing numbers of venture capitalists and stockbrokers, as many as 50 million, have opened stock trading accounts. The combined market capitalization of the stock exchange has swollen to 520 billion United States dollars (USD), making the combined Chinese stock market the third largest in Asia. However, very little change has occurred in rural areas where 80 per cent of the population resides. While the economy has grown substantially in cities and metropolitan areas along the eastern coast the prosperity gap between the coastal areas and the hinterland is widening. An outcome of this gap is that 100 million people leave their farms annually and migrate to cities. China is now at a crossroads. Despite this growing prosperity gap the push for quicker economic development continues. The telecommunications sector, and the Internet in particular, are seen to be central to this quest. A GLOBAL PLAYER IN THE INFORMATION REVOLUTION Chinese demand for Information Technology (IT) is exploding to such an extent that it is the second largest market for IT equipment and services in Asia. Currently a structured and restricted liberalization...
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