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10/19/2007
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China To Ease Rules On Mobile Phone Makers

China's State Council eliminated about 186 administrative examination and approval items that cover mobile communications.

China this week unveiled plans to remove limitations it previously put in place that prohibit manufacturers from making mobile devices in the country without authorization.

China's State Council eliminated about 186 administrative examination and approval items that cover mobile communications, according to a report in BusinessWeek. The move means that China's existing restrictions that control the production and distribution of mobile devices will be lifted.

In the past, China required that manufacturers obtain production licenses from the Ministry of Information Industry in order to create mobile devices. The Ministry, which is a regulatory body in charge of the manufacture of products ranging from electronics to communications, had issued 49 mobile device production licenses to 38 companies between 1998 and 2005, according to the report.

The elimination of these restrictions doesn't necessarily mean that manufacturers will flood the Chinese market, but it does open up the country to more competition.

In a related development, Chinese authorities on Thursday began advocating the restructuring of the country's telecommunications industry. Deputy Minister Lou Qinjian of China's Information Industry said more competition needs to be introduced to "weaken the monopoly of heavyweight operators."

China currently has four major players in telecommunications: China Mobile and China Unicom providei mobile services, and China Telecommunications and China Netcom provide fixed-line services. Cell phone subscribers continue to outnumber landline subscribers, creating a huge gap in profits between mobile operators and fixed-line operators.

It is expected, however, that the restructuring will apply only to domestic operators and will exclude private or foreign competition.

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