Lehman, Lee & Xu: I hear that AT&T has set up a joint venture with China Telecom to provide broadband Internet service in Pudong. Does this mean that China now allows foreign Direct Investment in its zealously restricted telecom and Internet market?

I hear that AT&T has set up a joint venture with China Telecom to provide broadband Internet service in Pudong. Does this mean that China now allows foreign Direct Investment in its zealously restricted telecom and Internet market?

The joint venture you mentioned was formed in December of 2000 to provide service to multinationals situated in Pudong only and was noted as a breakthrough event in the market since at that time there were no relevant laws or regulations in place.

On Dec. 11 2001, the Administrative Regulations on Foreign-invested Telecommunications Enterprises (the Telecom FDI Regulations), were promulgated and effective from January 1st 2002, which in conjunction with the Telecom Regulations, the Regulations on Internet Information Service and other relevant laws and rules, have laid down the legal and administrative foundations for FDI in the telecommunications sector in China. These rules set out the exceptions and restrictions with which foreign capital can be used in certain telecom and Internet services.

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I hear that AT&T has set up a joint venture with China Telecom to provide broadband Internet service in Pudong. Does this mean that China now allows foreign Direct Investment in its zealously restricted telecom and Internet market?