Publicly, China tries to project the face of a forward-looking, market-friendly country welcoming to foreign businesses. In private, it seems substantial tension remains between free market forces and tight government controls.
The Wall Street Journal reported Friday that Chinese government officials would like at least one of the country's four telephone carriers to use homegrown technology when they upgrade their wireless systems over the next two years. But carriers China Mobile, China Telecom, China Unicom and China Netcom all have reservations about the technology coming out of China and some have openly voiced a preference for technology developed outside its borders.
Officials of China Mobile, the largest cellular provider in the country, have publicly said they prefer European technology.
With a deadline of the 2008 Beijing Summer Olympic Games getting closer, government officials face pressure to have a modern mobile infrastructure in place to show off China's progress to the rest of the world. But as the Journal reports, they also have an interest in promoting Chinese companies.
Any restrictions imposed on foreign investments could affect several western gear makers who covet the massive Chinese market. The country's 300,000 cell phone users are expected to double in ranks within four years. Still, it could be the Chinese carriers that government controls threaten most.
No one seems sure how this tension will shake out, but one scenario is that the government will select one carrier to buy its equipment from a Chinese company, automatically forcing that company into a less competitive position. — Andrea Orr
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