Vodaphone Company Introduction

1-how does china's entry into the WTO affected vodafone's development in china and hong kong?How has it affected foreign telecommunications investment in general?

Joining WTO is a very important event for the development of China at the beginning of the 21st Century. This important event is preceded by the establishment of permanent normal trade relations with the United States in 2000, twenty one years after the normalization of diplomatic relations between the two countries. These two events are significant because they mark the Chinese economy coming of age as China is recognized by the United States and the world economic community as an equal partner. They also signal the continued forward movement of the economic globalization process. China has become an important member of the world economic community and plays an important role in the global economy. Conditions for China to enter WTO include (1) the lowering of tariffs for imports, (2) thepermission of foreign firms to sell directly in the Chinese domestic markets and (3) the opening of the telecommunication and finance sectors to more foreign competition. China agreed to lower its tariffs on agricultural products from 31.5 percent to 14.5 percent overall by January 2004. Tariffs of industrial products would be lowered from 35 to 17 percent in a period of five year. Foreign manufacturers, including automobile companies, would be able to sell their products directly to domestic consumers without having to go through Chinese trade organizations. Foreign investors would be able to own up to 40 percent of shares of commercial banks in China, and up to 48 percent of telecommunication firms. Foreign banks can offer services in local currencies to Chinese corporations. Foreign firms can hold minority shares in securities fund management joint ventures, at 33 percent initially and increasing to 49 percent three years after joining. Foreign firms can also provide accounting, management consulting, architecture and engineering services. In return, quota on China's textile and clothing exports will be removed by 2005

2-Why has vodafone still held a minority stake in CMHK? what factors do you think have inhibited vodafone's investment in the chinese telecommunications market?.

In order to compete with China Mobile (Hong Kong), who serves more than 153 million subscribers, about half of the nation's total, making it China's and the world's leading wireless operator by subscribers. It would be unlikely to think that such a large and thriving corporation is state owned, and is one of the major competitors of Vodafone, a private corporation, but this is exactly the case. Therefore, wireless giant Vodafone has invested ownership in 3% in China Mobile (Hong Kong), to ultimately break into the China market.

3-What has china unicom done in its attempt to remain competitive? what are