| Ministry of Information Industry to Boost Competition
April 13, 1998 (BEIJING) -- The setting up of the new Ministry of Information Industry (MII) is likely to
promote stronger competition among China's electronics and telecommunications industries.
|Also, it will likely solve some of the existing conflicts between the Ministry of Electronics Industry (MEI)
and the Ministry of Posts and Telecommunications (MPT).
On March 6, Luo Gan, secretary-general of the State Council, announced at the First Session of the Ninth
National People's Congress (NPC) that the Ministry of Information Industry will be set up by combining the
existing MPT and MEI.
The new ministry will be responsible for "bolstering the manufacturing business of information products,
telecom and software industries; formulating sectoral programs, policies and laws codes, mapping out an
overall plan for telecom trunk networks, broadcast and television networks, as well as special-use telecom
networks for military departments and other departments."
Also, the new ministry will exercise government functions for information and network management within the
Ministry of Broadcast, Film and Television; China Aerospace Industry Corp. and China Aviation Industry Corp.
And a new State Postal Bureau will be established under its administration.
According to an MEI official, the merger means that some departments of the MEI and MPT will be combined to
avoid overlapping functions. As a result, the official said he expects that about 100-150 people from each
ministry will lose their jobs.
The official said the merger did not come as a surprise because of the increasing conflicts between MEI and
He said that MPT had previously procured electronics components and parts needed by the country's telecom
sector mainly from MEI. However, as China's telecom industry developed at a faster pace, MPT also produced
its own electronics components and parts. And as production facilities of both MPT and MEI have expanded in
recent years, they started selling some of their products to domestic companies, thus creating more conflicts
between the two.
MPT holds a monopoly on China's telecom industry through its business arm, China Telecom Corp. This situation
was changed in 1993 with the establishment of the China United Telecommunications Corp. (China Unicom) by MEI
and the Ministry of Power Industries and Railways. But China Unicom failed to make a major impact on the
market as China Telecom still controls most of the market, under the blessing of MPT.
According to the official, because the new MII will no longer supervise the former enterprises of MEI and
MPT, such enterprises will be responsible for their financial gains and losses under the market economy. He
predicted that China Unicom will benefit from the merger, because it will be able compete more fairly with
(Keith Chan, Asia BizTech Correspondent)