Anti-Competitive Behaviors in Managed Competition: The Case of China’s Telecommunications Industry

Abstract

The Chinese telecommunications industry has attracted considerable interest in recent years. Much of this interest has, however, focused on issues such as the growth of the industry, its structure or how it is regulated. The anti-competitive behavior of incumbents, however, has largely been overlooked. This article addresses this oversight by focusing on the incumbents’ suspected anti-competitive behaviors within the Chinese broadband tele-communications market. In doing so, the key role of the June 2001 Circular in shaping operator behaviors within the broadband telecommunications market is highlighted. From the analysis it is clear that the incentive of anti-competitive behaviors exists in the Chinese broadband market structure that was created through restructuring and June 2001 Circular, and that anti-competitive strategic behaviors of the incumbents are suspected to have occurred. The Chinese government does not have at its disposal, or has not implemented, measures to counter or deter this type of behavior.