*EPF108 06/21/2004
Text: Huge Growth Potential in U.S., China Telecom Sectors, Evans Says
(Commerce secretary urges collaboration to seize opportunities) (1660)

Entrepreneurs and innovators recognize the enormous potential for growth in the telecommunications sectors of the United States and China, U.S. Secretary of Commerce Donald L. Evans told the third China-U.S. Telecommunications Summit, meeting in Chicago on June 17.

"That is one of the significant reasons why we are the two fastest growing economies in the world," Evans said.

The U.S. economy is "beginning to rebound after several tough years," according to the secretary, and overall telecommunications spending in the United States rose by 4.9 percent in 2003.

"We have seen double-digit spending increases in areas such as wireless services, video- and audioconferencing, and high-speed Internet access," Evans said, noting that the Telecommunications Industry Association's 2004 Telecommunications Market Review and Forecast predicts annual growth of over nine percent in the U.S. telecommunications industry over the next three years.

Evans said the Bush administration is promoting such growth by encouraging the development of wireless broadband technologies and facilitating broadband access.

With usage of wireless technologies in China growing at a rapid pace and numbers of subscribers to wireless services soaring into the hundreds of millions, Evans said, "China's telecom market, estimated to be worth $20 billion [U.S. dollars], is among the largest in the world."

"China now has 300 million mobile subscribers and expects to add another one hundred million by 2005," the commerce secretary said, adding that China is the second largest market in the world for "wireless fidelity" technology.

"This growth represents a tremendous opportunity for economic development and increased prosperity across China," Evans said. "The opportunity is there. We must seize it together with candor, with cooperation, and with a spirit of confident optimism."

Evans pointed out that U.S. exports still comprise only a small percentage of the total Chinese telecommunications market. "There is ample room for expansion of U.S. exports," he said. "We look forward to working with our Chinese colleagues during this Summit and beyond to create these opportunities."

This year's summit was held in the United States for the first time. Two previous China-U.S. Telecommunications Summits were held in China: in Dalian in 1997 and in Guangzhou in 1999. The event offers U.S. government officials and corporate executives an opportunity to engage in dialogue with their Chinese counterparts.

Following is the text of Secretary Evans' remarks, as prepared for delivery:

(begin text)

REMARKS BY
SECRETARY DONALD L. EVANS

CHINA-U.S. TELECOMMUNICATIONS SUMMIT
CHICAGO, ILLNOIS
JUNE 17, 2004

(Text As Prepared for Delivery)

It is a pleasure to be hosting the China-U.S. Telecommunications Summit in the United States for the first time.

The two previous Summits, in Dalian in 1997 and in Guangzhou in 1999, were successful events. They built greater cooperation between our governments and enhanced business relationships and opportunities for our companies.

We look forward to building on the success of these previous Summits and further strengthening the economic relationship between our two countries.

This Summit addresses a number of key issues and comes at an important time. The U.S. and China are the primary engines in the global economy, and, as we all know, IT drives productivity and economic growth.

Thanks in large part to President Bush's policies the economic recovery in the United States is accelerating. The U.S. economy grew at 4.2% in the first quarter of 2004 and economic growth in second half of 2003 was the fastest in nearly 20 years. We have created over 1.4 million jobs since last August and over the past six months U.S. exports have increased by 22% at an annual rate.

The telecom sector in the U.S. is also beginning to rebound after several tough years. According to the Telecommunications Industry Association's (TIA) 2004 Telecommunications Market Review and Forecast, overall telecom spending in the U.S. rose by 4.9 percent in 2003.

We have seen double-digit spending increases in areas such as wireless services, video- and audioconferencing, and high-speed Internet access.

In addition, this report predicts that from 2004-2007, the U.S. telecommunications industry will increase by over 9 percent every year and become a $1 trillion industry.

To promote this growth and foster new innovation, President Bush is clearing away the obstacles holding back a new wave of technology-led economic development. At the top of the President's IT agenda is a bold vision for broadband in America.

On March 26, 2004, President Bush made broadband a national goal by calling for universal and affordable access by 2007. The Administration is supporting this goal by creating an economic and regulatory environment in which broadband can flourish.

The Administration is encouraging wireless broadband technologies. We're making more radio spectrum available for unlicensed devices, such as Wi-Fi, and other licensed wireless technologies.

In addition, the National Telecommunications and Information Administration is working with the Federal Communications Commission to encourage technical standards that will allow power lines to carry broadband.

On the regulatory front, President Bush has supported policies that will ensure that Voice over Internet Protocol is free from unnecessary regulation.

The President also favors a permanent moratorium on Internet access taxes. Legislation which would do this is currently being considered in Congress.

As a result of these and other initiatives, broadband in America is flourishing. The number of broadband subscribers in the United States has increased from 10 million in 2001 to over 21 million today.

Broadband revenues have also grown. Another recent TIA report indicates that broadband revenues grew by nearly $10 billion from 2000 to 2003.

In China, as in the United States, entrepreneurs and innovators recognize the enormous potential within the telecom sector. That is one of the significant reasons why we are the two fastest growing economies in the world.

In 2003, China overtook Japan to become our third largest trading partner. The total merchandise trade between the U.S. and China totaled $181 billion (Chinese exports to the United States - $152.3 billion, and total exports from the U.S. to China - $28.4 billion).

China's telecom equipment market, estimated to be worth $20 billion, is among the largest in the world. However, of that total market, U.S. exports comprise only $630 million. There is ample room for expansion of U.S. exports. We look forward to working with our Chinese colleagues during this Summit and beyond to create these opportunities.

The Chinese government clearly recognizes the importance of the telecommunications sector to its economy. It has designated telecom as one of the "pillar industries" of economic reform and plans to inject $500 billion from 2001 - 2005 into its telecom infrastructure.

We have seen the landscape of China's telecom market change significantly just since the last China-U.S. Telecom Summit.

For example, at the time of the Guangzhou Summit in 1999, China had 40 million mobile phone subscribers and over 130 million wireline subscribers. By 2003, China had nearly 207 million mobile subscribers and 215 million wireline subscribers.

China now has 300 million mobile subscribers and expects to add another one hundred million by 2005.

And China is now the second-largest Wi-Fi market in the world.

This growth represents a tremendous opportunity for economic development and increased prosperity across China.

The opportunity is there. We must seize it together with candor, with cooperation, and with a spirit of confident optimism.

This third Summit provides a unique forum for promoting a policy environment that will facilitate business growth and job creation in the U.S. and China.

We look forward to discussions on the development of China's telecommunications industry, the establishment of an independent regulatory body in China and the advancement of technologies like Wi-Fi, 3G and sensors.

I hope that this Summit will also build upon the tangible results achieved during the recent U.S.-China Joint Commission on Commerce and Trade (JCCT) meeting in Washington.

Working with Vice Premier Wu Yi we established a process to advance the protection of intellectual property rights and promote China's progression towards market economy status.

We were particularly gratified to hear that China will follow a technology neutral policy on issuing licenses for the provision of 3G services. We agree that it is best for the Chinese service providers to make their own choices regarding which standards they wish to adopt in providing communications services to their customers.

We are also very encouraged by China's decision to delay implementation of a mandatory wireless encryption standard (WAPI) indefinitely. And by China's willingness to revise its WAPI standard by taking into account the suggestions and expertise of Chinese and foreign firms. We are confident that, if China's economic leaders approach similar problems in the future with the same determined spirit of cooperation, our relationship will grow even stronger.

Minister Wang, I look forward to continuing to work with you to promote these very positive steps. They will lead to even greater collaboration and business expansion between the information technology sectors in our countries.

As I survey the IT landscape, I see an amazing opportunity for the Chinese and American people. Our late President, Ronald Reagan, also saw the unlimited potential of technology as far back as 1984. He said: "Those who deal in a world of numbers cannot predict the progress of the human mind, the drive and energy of the spirit, or the power of incentives. We're beginning an industrial renaissance which most experts never saw coming."

I share President Reagan's optimism in the potential of the innovative spirit when it is allowed to pursue great things.

Thank you for the chance to participate in this important and timely Summit. I look forward to making progress and promoting even greater opportunity for our dynamic technology sectors in the years ahead.

(end text)

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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