The Quantification Of FDI Barriers To China’s Basic Telecom Services

The purpose of this paper is to explain why FDI has not entered China’s basic telecommarket since it entered WTO and relaxed the relevant policy. Quantifyvarious FDI barriers byconstructing a comprehensive indicator of FDI barriers in China’s basic telecom services thatincorporates both policy and non-policy factors which are collected by Multi-case AnalysisMethod. The AHP method and Fuzzy Mathematics are applied to ensure the objectivity of thequantifying process.The results indicate that:(1)The opening of value-added telecom sector of China revealedsignificant benefits since it joined WTO.The experiences of Japan and the Hongkong alsoillustrate positive effects and feasibility of the market opening in the basic services sector.（2）Policy impediments in China’s basic telecom sector have decreased significantly. But It’s stillvery important. we can see this from the index of the fourfactors,‘market monopoly’,‘theincompletion of regulatory system’,‘restriction of telecommunications business license’ and‘foreign equity limit’.(3) Non-policies barriers are playing an increasingly important role afterthe policy threshold greatly decreased, the ignorance ofthe former will lead to the overvalueof the market openness.(4)With the reducing in policy restrictions, remarkable non-policybarriers such as ‘The lack of the telecommunications act’‘Political risk’‘discriminatoryexamination and approval’ and ‘The lack of operability for foreign related regulations’havebecome the most significant barriers directly influencing FDI.‘Lack of telecommunicationslaw’,‘Discrimination in project evaluation process’, and ‘Low level of internationalization’have become subordinate FDI impediments, considerably revealing that market structure withstate monopoly feature is the key to further opening.According tothe conclusions above,several policy implications in further opening China’s basic telecom sector are also drawn.