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. Last Updated: 07/27/2016

Chinese Leap Into New Tech

BEIJING -- Telecommunications Minister Wu Jiachuan said China is aggressively leapfrogging its way onto a futuristic information superhighway by exploiting the country's very backwardness. Beijing plans to use $7 billion in foreign investment by 2000 but still will not allow foreigners to take equity or management stakes, Xinhua news agency quoted the minister as saying this week. "Compared with Western countries China is spared the pain of eliminating outdated equipment due to its not-so-developed telecommunications infrastructure," Wu said. Instead, he said, it could install the newest equipment without being hindered by entrenched technological interests. "China's telecommunications construction can leap over some development stages and technical levels which the Western countries had gone through and directly adopt highly efficient new technology and equipment," Wu said. Wu reiterated a ban on direct management or equity ownership of services by foreigners, a policy that reflects national security concerns and, some analysts say, the ministry's strong interest in protecting its lucrative monopoly. Wu said foreign investment was welcome in telecommunications-equipment production and supply as well as in engineering, design, product development, research and education. "China especially welcomes overseas businessmen to invest in telecommunications construction projects," he said. "The Chinese side will ensure their interests according to the rule of mutual benefit." Wu said China hoped by 2000 to tap "at least" $7 billion in foreign capital -- more than the $5.67 billion it has used over the last 10 years. It would use $2.1 billion in foreign capital in the next 18 months alone, he said. Overall investment in telecom fixed assets last year was 40.4 billion yuan ($4.7 billion), he said, while the 1994 budget was 53.6 billion yuan. As a matter of policy, China is installing only advanced digital switches, bringing a fully automatic phone service to vast areas where until now there has been no service at all. "Some 89 percent of the exchange switches for urban telecommunication systems in the country and 99 percent for long-distance calls are computerized," he said. Beijing plans to install 10 million telephone lines a year up to the end of the century, a task Wu called crucial and unprecedented in any country. He also stressed China's rapid adoption of fiber-optic cable. The addition of 12 million lines last year brought China's total to 42 million -- still one of the world's lowest rates at 3.5 lines for every 100 people. The target is 140 million lines by 2000, he said. With the exception of the Tibetan capital Lhasa, all of China's provincial capitals would be wired into a trunk network of fiber-optic cables by next June, Wu said. "Some 17 more major optical cables, to add to the present 22, will be constructed by the year 2000 to intensify the telecommunications coverage and take Lhasa and other cities in Tibet into the network," Wu said. Wu said that by 2000 China's telecom system would be the world's biggest and have "all the telecommunications techniques available elsewhere in the world." Its main goal will be to "provide an information superhighway for the national economy."