Qualcomm welcomes China state reforms
By Justin Jin
BEIJING, March 23 (Reuters) - U.S.-based telecommunications group Qualcomm Inc [Nasdaq:QCOM - news] said on Monday it was hopeful that China's plan to streamline government would remove some red tape that has slowed the establishment of foreign-funded telecommunications projects.
''I would hope that with the restructuring and streamlining it would be easier to set up manufacturing facilities and other important facilities than in the last year,'' Chairman and Chief Executive Officer Irwin Jacobs said in Beijing.
This month, China's parliament voted to abolish 15 ministries and shed millions of communist bureaucrats, casting aside relics of a centrally-planned economy.
Commercial enterprises under a hodgepodge of ministries will be spun off, removing bureaucrats from day-to-day control of the economy.
''If the companies' regulations are handled separately, that should certainly help the expansion of telecommunications here and open even more so to technology,'' Jacobs told reporters.
Parliament approved a plan to bunch together the Ministry of Posts and Telecommunications with two other ministries under the new Ministry of Information Industry that would be headed by the former posts and telecommunications boss.
As long as the reform plans were carried out, ''there will be significant further investment in China,''said Jacobs, who was in China to announce a joint research project with Beijing University of Posts and Telecommunications.
The project would focus on developing and popularising Qualcomm's code division multiple access (CDMA) technology in China, he said.
''The key issue is to get more cities with CDMA,'' Jacobs said, adding that the network was expected to come online in the cities of Beijing, Shanghai, Guangzhou and Xian soon.
There were roughly about 10,000 subscribers -- a tiny figure -- using CDMA in China, said James Coyne, Qualcomm's Vice President for International Sales.
Qualcomm officials declined to give company financial figures for China operations.
Qualcomm, which has signed a four-year $300 million deal to sell its CDMA handsets to China's Telecom's Great Wall, has so far invested ''several million dollars'' in the country, Jacobs said.
The figure was expected to rise once the San Diego, California-based company started to manufacture in the country, Jacobs said, adding he hoped approval would be granted by the end of this year.
Qualcomm wants to export from China eventually, he said.
Jacobs praised the Chinese government economic policies at a time when many other Asian countries were suffering from a regional financial meltdown.
''The financial problems in other parts of Asia have directly affected us,'' Jacobs said.
''We are pleased to see that the economic planning here appears to aim at avoiding a potential crisis,'' he said.
Although the currency slump in many Asian countries has made resources in these countries cheaper, China's decision not to devalue the yuan would not significantly affect Qualcomm's decision to set up factories there, Jacobs said.
''Because China is such a major market, and because the amount of materials that will be sourced locally will initially be small, non-devaluation in China is not a major factor,'' he said.
($1.0 equals 8.3 yuan)
Hopefully there will be more good news than this from China's Second International Summit on CDMA Technology this week in Beijing.
Caxton |
