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To: Maurice Winn who wrote (8942)	2/27/1998 3:12:00 PM
From: Caxton Rhodes	Respond to of 152472

China Shake-Up May Free Unicom At Last By Mike Newlands 27-FEB-98 With China's National People's Congress set to re-open on 5 March, observers in Beijing are predicting the imminent creation of a new super-ministry with sweeping responsibility for all aspects of communications technology and policy. The new ministry prove the key to accelerating the still relatively slow-track progress of Chinese telecommunications reforms. ÿÿÿÿÿÿ Following a few tense days of closed session negotiation among the Chinese Communist Party elite, the new Congress is expected to be the rubber-stamping of a new, streamlined government structure that will reduce China's ministeries from 40 to 29. ÿÿÿÿÿÿ One of the major victims, or beneficiaries depending on viewpoint, of this shake-up will be China's communications sector, which will become the fiefdom of a new State Information Commission overseeing telecommunications, data communications and broadcasting policy. It will be created by the merger of three ministries: the Ministry of Posts and Telecommunications, the Ministry of Radio, Film and Television ÿÿÿÿÿÿ and the Ministry of Electronics. ÿÿÿÿÿÿ The new minister responsible will not be known until the NPC announcement next week, but there are two top candidates: Wu Jichuan, the present Minister of Post and Telecommunications, and Liu Jianfeng, a provincial governor and former associate of China's President, Jiang Zemin, at the Ministry of Electronics. Leaks from the Communist Party meeting suggest that the apparent outsider, Liu, may have got the job. ÿÿÿÿÿÿ Whoever is at the helm, the Commission will be responsible for policy-making, regulation and licensing, and for negotiations related to entry to the World Trade Organisation. Other functions of the existing three ministries will be spun off into ÿÿÿÿÿÿ semi-independent corporations. ÿÿÿÿÿÿ The Ministry of Posts and Telecommunications has already created China Telecom, and the Ministry of Electronics is in the process of establishing China Electronics Corporation. China International Television and CBSat will also become semi- ÿÿÿÿÿÿ autonomous. ÿÿÿÿÿÿ One of the main beneficiaries of the shake-up is expected to be China's fledgling second national telephone operator, China Unicom. The company wants foreign investors, but the current telecoms structure and policy means potential Unicom investors must first negotiate tortuous bureaucratic process. Under a new regime, Unicom hopes the new regime may clear a path to allow foreign partners to form offshore ventures with its Hong Kong subsidiary which could then have contacts with Unicom in China. ÿÿÿÿÿÿ Within China, Unicom has also faced stonewalling from the Ministry of Posts and Telecommunications over connection to the national network. Its first fixed-line network was launched in Tianjin last July, but still has no customers because the Ministry will not connect the 50,000 line network up despite public pronouncements to the contrary.