New Developments and Empirical Evidence
Edited by Michael Faure and Xinzhu Zhang
Chapter 7: The effect of the Chinese telecommunications reform on industrial growth: 1994–2007
From the beginning of the 1990s, China has implemented large-scale economic reform in the telecommunications industry, which has broken the monopoly of the Ministry of Posts and Telecommunications and made great achievements. China developed from a country with poor performance in telecommunications to one that has the largest telecommunications market. In 1994, China’s telecommunications industry earned 48.73 billion Yuan in revenue. And this figure has reached 490.68 billion RMB, with an annual growth rate of over 13.5 per cent which is far higher than GDP growth speed. However, the industry failed to maintain its high growth and has suffered from slow growth in recent years. In 2007, for the first time in 30 years the telecommunications industry fell behind China’s GDP in growth rate. And its year-on-year growth speed was only 4.1 percent for the year 2009, which is lower than the 6.6 per cent industry growth rate in 2008 and the 2009 GDP growth rate (Annual report of the China Communications Statistics 2009). China’s telecommunications industry has experienced a growth conundrum, given its previous fast growth. How is the economic reform in the telecommunications industry related to industry growth? How will different reform measures contribute to the telecommunications industry growth rate respectively? Has stagnation in the reform affected industry growth? How much will it contribute if continued efforts are made in telecommunications reform?
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