21st Century Chinese Puzzle: How To Hear A Billion People (A)

This article describes a plan on the part of the Chinese government to ensure that each village in China has a telephone by 2010. According to the article, ninety per cent of the country has telephone lines but the remaining ten per cent represents 80,000 villages located in areas much of which are in western China, the poorest, most remote and rugged region.

The article states that the goal of this project is for the government to narrow an economic and social gap between rural inhabitants and city dwellers in villages and cities across the country. It describes some rural inhabitants earning as little as $720.00 in the impoverished parts of central and western China. According to the article, farmers account for nearly 62 per

cent of the population and the issue of having them connected has become a priority for President Jiang Zemin who has a goal

of building “a well-off society in an all-round way.”

According to the article,"the goal of fostering social equity has wide support" which has led the debate on universal service

to focus "more on how to make it work rather than challenging the very concept of it." The authors suggest that "the challenge

is to deliver an egalitarian idea in a competitive market-driven environment."

The article describes the project as costing "billions of dollars" which will be in the form of government subsidies.

Universal coverage can occur through taking "monopoly profits from the more developed regions and investing them in poorer

areas." The article makes reference to statistics from the Information Industry Ministry which indicates that telephone

subscribership has jumped from 100 million in 1998 to approximately 600 million in August 2004, for both fixed-line and

mobile phones.

According to the authors,"some analysts argue universal service is not incompatible with the market." There is a growing

agricultural economy and the internet "has made the Chinese agriculture ministry’s website the second most popular farming

viewing in the world." The other development is that the migration of people from villages to towns and cities has also

fostered demand for telecom services.

These advances have occurred, according to the article, because of reforms made in the late 1990s when the Chinese government

sought to increase efficiency by seeking capital overseas for IT development. Part of these reforms led to the end of a

monopoly by China Telecom, and led to six operators: China Telecom, China Netcom, China Mobile, China Unicom, China Satellite

and China Railcom. As state-controlled stock companies, not one has a market share of over 50 per cent which according to the

article is indicative of how competitive the market is today.

According to the authors, if the project succeeds all 31 provinces of China will be included. One of the biggest issues is

determining who has the primary responsibility of providing telecommunication services in villages - the state, private

companies or both? And which of the telephone companies is going to do what? The article describes the main motives of the

telecom companies as making profits by enticing more customers, not investing billions of dollars to extend a network out to poor areas.