TEXT: DALEY URGES CHINA TO DEREGULATE TELECOM MARKET
(Hails entry of A.T.& T. into Chinese market)Washington -- U.S. Commerce Secretary William Daley has hailed the entry of the U.S. telecommunications company, American Telephone & Telegraph Company (AT&T), into the Chinese market as an historic step to help develop electronic commerce.
Speaking in the southern Chinese city of Guangdong April 1, Daley urged China "to allow greater competitive supply of wireless technologies" into its market.
He said the U.S. government is concerned about recent steps in China that seem to move away from competition and deregulation.
The United States wants to create a global marketplace for all people and all nations with stable laws, consumer protections and incentives for competition, the secretary said.
Following is the text of Daley's speech as prepared for delivery:
(Note: In the text, "billion" means 1,000 million)
(begin text)
Remarks by
U.S. Secretary of Commerce William M. Daley
China-U.S. Telecommunications Summit
April 1, 1999
Guangdong, China(As prepared for delivery)
Eighteen months ago, we held our first telecommunications summit. It was a timely meeting. China has one of the largest and fastest growing telecom markets in the world. The United States produces some of the world's best and most sophisticated telecommunications and information technologies.
So we brought together representatives of our private sector and our two governments. And we laid the foundation for an on-going dialogue on the opportunities -- and challenges -- of the digital age.
Today, we are here to continue the dialogue.
I would like to use my time this morning to do two things. First, to give an overview of how the emerging digital economy is changing the way business is done in America; and second, to talk about the steps we can take to promote the growth of telecommunications.
First, in America, it is a very good time to be in the information technology business. Today, more Americans make computers than make cars. More Americans build semiconductors than construction machinery. More Americans spend their working hours processing data than refining petroleum.
Since 1993, sales of telecommunications equipment and phone service have nearly doubled. So have their exports.
We now have some 400 publicly-owned telecommunications companies.
And one in four Americans has a wireless phone. That's a 60 percent increase in only two years -- in a country where nine out of 10 people already have phones in their homes. And as for the Internet, I really believe in the history of commerce there has never been anything like what we are seeing. It has created conditions for new businesses to exist. It has enabled small companies to sell products around the world, just like a Fortune 500 company, with its massive distribution system.
The Internet has changed the way businesses do business. They can link more tightly to suppliers and distributors. And they can cut their costs.
This has changed the way businesses interact with customers. Even a technically-challenged Commerce Secretary now shops on-line.
CEOs all tell me their forecasts for on-line sales have proven to be way too low. In 1997, on-line retail sales were $3 billion. Last year, they soared to $9 billion -- a tripling. Can you imagine if the rest of the economy tripled every year?
When you look at this, it is clear that private investment -- not government action -- is driving this.
Under the leadership of President Clinton and Vice President Gore, we have adopted a minimalist approach to regulating electronic commerce. Government regulation is slow and cumbersome, as we all know. It is not well suited to a medium that moves and changes as rapidly as the Internet.
So, we and other countries have let the private sector lead. But we know some rules of the road are needed. In those cases, we have called on the private sector to develop self-regulatory approaches and technology solutions. They are addressing social concerns, such as privacy or protecting children from inappropriate content.
And this approach is beginning to pay off, by giving consumers more choice and more power.
This points to the second issue I want to address and that is the policy steps governments can take to promote the growth of the emerging digital economy.
When President Clinton and Vice President Gore took office, they foresaw the importance of these technologies. They developed a policy blueprint to make sure that our national information infrastructure would be vibrant, competitive, and as efficient as possible.
It has worked. In the last six years, information technologies have resulted in a significant portion of the growth of the American economy -- an economy that is in the longest expansion in peacetime history. And they have helped created high-paying jobs.
The economic gains proceed hand-in-hand with a host of social benefits. Schools and universities are offering inner city students new learning and career opportunities. Health care providers are finding cost effective ways to care for isolated patients. Across America, communities are pulling together to address common concerns and to share common values.
And governments are using the Internet to deliver services faster and better. I know on the Commerce Department home page, we put up more than 50,000 pages a week. And people are using the information. We get 2.5 million hits a day. They can check the weather, search patents, or learn how they can do business in China.
Other countries have also developed policies that have resulted in substantial growth in information technology. They started by opening their markets and deregulating their telecom sector.
In the four years since Argentina began privatizing its telecommunications monopoly, the number of telephone lines has more than quadrupled. When South Africa decided to license a second cellular operator, the number of subscribers soared from 40,000 to 340,000.
As you know, China also is experiencing strong growth. I understand China had an explosive growth of telephone subscribers last year. It now exceeds 110 million.
The number of new mobile phone subscribers is growing by a million a month. I can tell your business is good, because during every speech I have made in China this past week, several people have received phone calls!
Yesterday, in Shanghai, we announced a significant development in China's telecom services. AT&T and the Shanghai government signed a framework agreement that will enable for the first time a foreign partner to provide telecom services in China. That is a real breakthrough, and we hope it sets a trend.
I know Internet access is also growing rapidly in China. This is resulting in increased Internet penetration and usage. And it should grow even faster in the wake of the telecom price cuts announced in February.
But obviously there is still much work to be done. Today, we want to urge China to speed up decisions to adopt pro-competitive approaches to meet e-commerce potential.
We want to urge China to allow a greater competitive supply of wireless technologies. And we are concerned about recent steps in China that seem to move away from competition and deregulation. This is a concern I will convey in my meetings here.
This week, as I've been on an infrastructure trade mission, I have heard a great deal about the long-term, because infrastructure projects are long term.
We in the west have been the beneficiaries of the genius of China's inventions for a very long time -- thousands of years. No matter where in this world a new idea is born, sooner or later, we all get to share it.
Sometime in the next decade, more than a billion people will be sharing the Internet worldwide. It does not stop at any nation's borders. It has the capacity to connect countries and customers like nothing on this earth.
And it doesn't stop in the big cities. It can open up a new world to the people in villages, to the places where there may be no roads, but where people still need education, and health care, and culture.
Our challenge is to make this link as accessible as possible. As President Clinton says, and I will end on this: We have to design the architecture for a global economic marketplace, with stable laws, strong protections for consumers, serious incentives for competition -- and a marketplace to include all people and all nations.
Thank you.
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