Indeed, foreign investment in China has developed at an unprecedented rate in quantity, quality and scale in many industry sectors. In particular, the Europeans have pushed Beijing to speed up the rate of opening of the Chinese mobile market. As China has prohibited direct foreign investment in the telecommunications market, foreign investors have been limited to participating in China's market through contracts for equipment supplies, or for specific work on particular infrastructure projects. Change is on the horizon in China. However, it remains to be seen whether the proposed changes will increase the availability of foreign capital to China's telecommunications industry and allow foreign investors to become directly involved in the telecommunications sector.
China holds a promise for foreign investors.
Given China's aspirations to become a member of the WTO, this promise may translate into more opportunities for financing and investment in the telecommunications sector. The true test for whether the country will allow such developments, however, will occur when the Chinese government actually undertakes a comprehensive deregulation of its telecommunications sector. In order for China to benefit from foreign financing, several changes need to take place in order to ensure a transparent regulatory environment and a level playing field. Foreign service suppliers will be permitted to establish joint venture value-added telecom enterprises and basic telecom services enterprises without quantitative restrictions.