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3G投资对内需和经济增长的拉动浅析
顾问  李文峰   《中国对外贸易》   总第5期
 
In 2008, influenced by the global financial storm, Chinese economy had faced the severe testing terrible experiences. Facing the difficulty, Chinese government carried out RMB 4 trillion investments’ economy-stimulating policy. In communications industry, the government speeds up the reorganization of telecom operators and the investments in 3rd Generation Mobile Communications (3G) sector. The operators plan to complete direct investment of 280 billion RMB in this sector in the next two years till 2010. In Jan 2009, the Government formally issued 3G licenses.

Whether the investments in 3G will give a drive to the domestic demand, there has been an argument for 5 to 6 years, and still there are doubts about this even now. Then, is there a demand for 3G, and could the demand support the investments in 3G? And, at what content will the investments drive the domestic demand? In my opinion, the worry is not necessary, as the investments in 3G will have good influences on the following three aspects.

Effectively stimulate domestic demand and other investments

Investments, consumption and export are the three main driving forces of the economic growth. And investments in 3G will push Chinese economy in these aspects (see the t below).

It is estimated that the direct investments in 3G in the future 5 years will amount to 1.5 trillion RMB or so, which will bring back a contribution of 10 trillion RMB in GDP of China, and take a large share. Investments in 3G will boost the development of telecom, equipment manufacturing, chip manufacturing, software, Internet, cultural and creative industry and other related industries.

Chart: how investments in 3G boost the economic growth

Mobile communication industry shares a part with the infrastructure construction. In a short term of 2 to 3 years, the investments in 3G will give a direct boost to the economy, but the influence will show up in a long term. It will help the informationization of agriculture, industry and service industry, reducing the communication barriers and easing the pressure on environment protection, and promoting service efficiency. From this point of view, the investments on “soft” infrastructure (information technology) will have a better yield ratio than those on “hard” infrastructure (buildings of reinforced cement).

Though listed as one of the three main driving forces, consumption hasn’t played its role rightly in boosting Chinese economy. 3rd Generation of Mobile Communications will create new style of communications and effectively stimulate the demand for 3G business, like video talk, mobile Internet and so on. China has a large population, especially in the coastal cities, where there is a vast market for mobile multi-medium and mobile Internet for the high grade business people and users who like entertainments. Meanwhile, in the period of 3G, the fierce competition between the three operators will terminate the duopoly monopoly in 2G era, helping further reduce the price for voice communication and stimulating the demand for voice communication. From the point of industry chain, operators used to make profits 80% voice communication and SMS and other few services, so they dared to reduce the prices. But now the competition become fiercer, and the pressure on price reduction will increase. On the other side, operators move to develop data services with a much larger market to secure profits and recover the reduced income voice communications, making a win-win for both the operator and users.

Investments in 3G network can also bring up the demand rural areas. Since long time ago, the basic voice communication in rural areas was restricted, the mobile phones are not so popular, number of Internet users is small, and the ways of receiving messages and entertainment types are limited. However, the users there have a strong demand for agricultural information and multi-medium entertainment. When the network for 3G is set up, 2G services will not disappear at once and will compete with 3G, which will force the operators to reduce the prices for 2G services and provide vivid 3G services. Popularizing the mobile communications through market rules will have a better result than the administrative orders (village telecommunication project), and the operators will take it easier.

Telecom and Internet are often the focused by the venture capitals. The investments telecom operators and equipment manufacturers will create a lot of dle and small-sized companies, boost the innovations in software and the content of mobile Internet, and prepare good resources for the Pioneering Plate. The issuing of 3G licenses has given a direct boost to the prices of stocks of telecom companies, bringing a long-term steady development back to the stock market. This is shown in the stock market. The operators’ and the equipments manufacturers’ future financing demand will active the cooperation finance market. For example, China Telecom and China Mobile have been back to A-share market, equipment manufacturers are getting financed selling equities and debts, and so on.

Informationization will boost the upgrade of related industries

To operators, 3G not only means new businesses, but also an evolutional reform in competing environment and operation mode. In the era of 2G, mobile communication operators provides similar services, therefore the core competition is on prices. But, in the new era of 3G, operators can provide customized data services, meeting requirements different users. In this way, the operation management level of operators will be upgraded.

Now the users of China Mobile TD are limited, which is doubted by the questioners, as TD-SCDMA is not mature as two other standards, WCDMA and CDMA2000, which are in commercial operation for years and completed equipments to terminals. As to TD-SCDMA, it is in commercial use for the first time among the limited users, for testing and adjustment in order to be improved. Meanwhile, as China Mobile has a great deal of 2G users, combined with the support government and partners in this industry chain, the success of operation is highly expected.

Now China is a great manufacturer, but the industrial level of manufacturing industry as a whole is not high, with high resources consumption and environment pollution. So the competing ability of Chinese manufacturing industry is low. The highly fluctuating prices in international fuel and raw material market in 2008 shocked Chinese manufacturing mainly involved in material processing. China must focus on developing telecom equipments and other products with a high technology and value added, to take a better position in the international industry chain.

China has made a strategy plan that is to boost the upgrade of industry through informationization, with investments in 3G as the start. 3G will bring forward the integration of mobile communication and Internet with radio, film and television industry, making preparation for the upgrade of manufacturing industry.

TD-SCDMA is a standard for 3rd Generation of Mobile Communication of which China has the intellectual property and with a high self innovative level. Now the communication service level in China is lagged behind Japan and Europe and USA, as the 3G services in Japan has been popular already, and the 3G market in Europe is under exploration. Opening of 3G market means opportunities to set up 3G industry chain, and can bring up local companies with competing ability, such as operators, information and entertainment content suppliers and equipment manufacturers, etc.

To the equipment suppliers of the TD industry chain, the licenses for 3G are long expected, with some companies like Commit and Amoi facing cash problems. The licenses for 3G will give confidences and hopes for companies.

To promote the transformation of export structure

Reviewing the years since China entered WTO, China made hikes in foreign trade, but the foreign trade is facing structural problems in recent years, as the products with low value added taking a large share. But the manufacturers can not decide purchase prices for raw materials, and the production costs are high, not able to afford the risks of reducing external demand and fluctuating foreign exchanges.

To a ry, it makes no good if the resource and low grade products have a too high share in export market for the ry to save resources and improve the position in international industry chain. The companies of the first level sell standards, the companies of second level sell brands, while the third leveled companies sell products. Since 1990s, thanks to the export of patented standards and brands, USA maintained a high economic growth rate in the past years. Qualcomm, Microsoft, Inter and Motorola and other high tech companies grasp the voice right on making high tech standards basing on their technical advantage, taking the leading role in international market and swooping great profits. Represented by ZTE and Huawei, some high tech companies in China are increasing the technical content of the export products, basing on the self-owned intelligence and cost advantage, improving the product structure for export, and reducing the share of high energy consuming and low value added products.

Booming of 3G industry will bring forward a great opportunity for the high tech companies in China, and push the development of local equipment manufacturers. Meanwhile, with a solid support domestic market after years’ development, these companies will play a more and more important role in the international market. If TD-SCDMA has a good performance in China, it will boost the export of telecom-related patents China and help found a number of corporation brands, having an extraordinary significance. Nowadays, the telecom equipment manufacturers, such as Huawei and ZTE, etc., are playing an increasingly important role in Chinese export market. In 2008, Huawei had a global sale income of 23.3 billion US dollars, increasing by 46% a year ago, with more than 75% the oversea market. In the future, more Chinese companies will enter the international market, and have their performances.

With 3G industry chain grows up, a lot of software, entertainment and culture companies will emerge, boosting the transformation of export structure and upgrade of industries. In a word, issuing of 3G licenses will stimulating the investments and domestic demand, strengthening the development and research ability of local industries and their competing ability in export market, boosting the development and upgrade of Chinese economy.