Regulatory Reforms in China’s Telecommunication Sector: A Case of Policy Transfer Failure or of Policy Divergence?

Abstract

In the past decade most countries have had to face the wave of telecommunication liberalizations that swept across the world. By-and-large, the “pro forma” liberalization program consisted of three elements: deregulation, introduction of competition and privatisation of national operators. Despite claims of developing a telecommunication market with Chinese characteristics, it appeared that some of the early elements of the regulatory reforms process bore strong resemblance with those found in other countries.

However after several rounds of restructuring over more than 15 years the Chinese government has failed by-and-large both to create an independent regulator and to introduce significant competition. Has the government deliberately refrained from adopting the liberalization programme usually prescribed by multilateral lending agencies or has it simply failed to do so? In other words, are we witnessing a case of policy transfer failure or of policy divergence? By answering this question, the paper seeks to shed light on China’s telecommunication sector reform process. It argues that the regulatory reforms that have taken place in China’s telecommunication market offer an interesting case study to test historical institutionalism’s capacity to accommodate and explain policy change and inertia. It aims to add to the debate of whether and why countries develop similar telecommunication policies over time.

Keywords: Regulatory Reform, China, Telecommunication, Policy Divergence