US envoy in Beijing telecoms mission
CAPTION: Time to talk: A girl talks on her parents'
mobile phone in Beijing, as US envoy David Aaron
flies into the capital seeking movement on joint ventures in
telecommunications.
STORY: A SENIOR US trade official was expected in Beijing on Monday
to discuss telecommunications and other trade issues in the first such
visit in months not related to Nato's bombing of the Chinese embassy in
Yugoslavia.
The one-day visit by Under Secretary of Commerce David Aaron, who
is scheduled to meet senior ministry and economic officials, was
unconnected to China's bid to join the World Trade Organisation,
officials said.
US consent is key to China's accession to the world trade body, but
Beijing suspended WTO talks with Washington after Nato bombed the
embassy in Belgrade in May.
Beijing has rejected as ''unconvincing'' Washington's explanation in
June that the bombing was a mistake stemming from intelligence
blunders and has refused to reopen WTO talks until the US provides a
satisfactory explanation.
Telecommunications would be among the key issues discussed during
Mr Aaron's visit, sources said.
One sticking point is the fate of US$1.4 billion (HK$10.92 billion) in
investment by US and other foreign firms in China Unicom, one of
China's two telecommunications service providers.
In the mid-1990s, US firms including Sprint, Nextel and Metromedia,
exploited a loophole allowing them to pour money indirectly into Unicom
and skirt an official ban on foreign investment in the telecoms sector.
China closed the loophole last year and began enforcing a ban on the
existing joint-venture contracts in March, barring Unicom from sharing
revenues with its foreign partners. Those companies are now
demanding repayment of their initial investments plus hefty hidden
costs, such as marketing and maintenance of the joint ventures, and lost
potential revenues.
Another issue up for likely discussion was China's apparent
foot-dragging on the adoption of a US mobile phone technology
anticipated to bring billions of dollars in contracts to US firms such as
Lucent Technologies and Motorola
Premier Zhu Rongji told US officials in March that Beijing would allow
China Unicom to roll out CDMA mobile phone networks to compete with
entrenched European-backed technology. Since then, however, two
Chinese ministries have jointly circulated an internal memorandum
barring the rollout of CDMA.
Foreign executives said they believed the freeze was an attempt by
China to force foreign companies into divulging CDMA technology
before allowing them into the market.
Several executives said they believed the ban was temporary. - Reuters
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