Telecommunications Policy 1994 18 (3) 195-205 The management of China’s telecommunications industry Some institutional facts Ding Lu The structure and organization of Chi- na’s local and provincial telecom- munlcatlons organlzatlons are not well known outslde Chlna. Thls paper de- scribes the lnstltutlonal structure and internal management practices of Chl- na’s telecommunlcatlons Industry. The first sectlon discusses the decision- making structure in the Industry. The second sectlon describes the financial status of local telecommunications companies and their Investment strategies, pattlcularly the flnanclal zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA r4 tatlonshlp between the national and loc- al companies. The thlrd section lntro- duces some Chinese vlews on the re- form of telecommunlcatlons manage- ment and regulation. The authoris Lecturer,Economics Depart- ment, National University of Singapore, 10 Kent Ridge Crescent, -Singapore 0511, Republic of Singapore (Tel: +65 772 6106; fax: +65 775 2646; e-mail: ECSLUD@NUSVM). This paper represents the author’sperson- al understanding of the institutions of Chi- na’s telecommunications industry and should not be interpreted as reflecting any official statements of policies. The author appreciates the valuable assistance of Mr Gao Yangzhi of Shanghai P&T Economy, MS Wang Yu and Mr Hu Zaichi of the Shanghai P&T Administration, and Mr Lu Wenda of the Shanghai Urban Economics Society. The responsibility for any error rests with the author. As China opens its economy to the world, the country’s telecommunica- tions industry remains an exception. China’s Ministry of Posts and Telecommunications (MPT), the traditional monopoly of the telecom- munications business, has virtually outlawed any form of foreign participation in China’s domestic telecommunications management. The lack of foreign involvement makes this stronghold of state-owned and state-run industry a largely unknown regime to the outside world. Academic and business research about the internal management of China’s MPT is rare. The purpose of this paper is to describe the institutional structure and internal management practices of China’s telecommunications industry. The material is based on recent interviews with local telecommunica- tions executives in China and a survey of articles published in P&T Economy, a periodical published by the Shanghai Post and Telecom- munications Economics Association. The sources of information, if not explicitly noted with publications, are derived from the records of the author’s interviews. The discussion will focus on the recent changes in telecommunications management at the local level. The first section discusses the decision-making structure in China’s telecommunications industry. The second section describes the financial status of local telecommunications companies and their investment strategies, particularly the financial relationship between the national and local companies. The third section introduces some Chinese views on the reform of telecommunications management and regulation. zyxwvutsrqpo The decision-making structure The principles of telecommunications administration In the 1950s to 1970s the management of China’s state-owned telecom- 0308-5981/94/030195-l 1 @ 1994 Butterworth-Heinemann Ltd zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFE 195