China Telecom

Paper Summary:

This report is about the problems of China Telecom, which is one of the largest state owned companies in China. Like most state owned companies, China Telecom is quite inefficient. This report aims at investigating the main causes of its inefficiency. Four main causes are pointed out as follows. First of all, China Telecom lacks sufficient competition because it controls the majority of the communications market. Then, China Telecom does not have a suitable corporate governance structure and effective monitoring system. Finally, inadequate technical skills of the employees also restrict China Telecom's development.

From the Paper:

"China's accession to the WTO will certainly be beneficial to non-governmental and foreign funded enterprises, but will cause many challenges to state owned enterprises, which have enjoyed government monopolies. Thus, state owned company reform, which is going to help them to be more efficient, is one of the most important tasks of China's 10th Five-Year Plan."

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