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By Ben King, 17 September 2001 16:16

NEWS Telecoms equipment firms are looking forward to a bright future of far-Eastern trade as China comes a step closer to joining the WTO. Reductions on technology import tariffs will provide a boost to telecoms firms who have depended on China as one of the few growth markets in a world heading towards recession. Cisco, Motorola, Nortel and Siemens are just a few of the US companies to announce big Chinese contracts in recent months as the Chinese market has almost single-handedly kept the industry alive. Import tariffs on high-tech products like telecoms equipment will be phased out by 2005. Foreign ownership and investment will almost certainly boost investment in Chinese networks. As soon as China joins the WTO, almost certainly next year, foreign firms will be allowed to own 25 per cent stakes in Chinese mobile telecoms companies for the first time rising to 35 per cent after one year and 49 per cent after three years. Foreigners will instantly be allowed to own 30 per cent of Chinese internet, paging and other value-added telecoms firms. Initially this will be restricted to the big cities of Beijing, Guangzhou and Shanghai. Two years later it rises to 50 per cent, and geographical constraints removed. Fixed-line and long-distance telecoms services will open more slowly, with foreigners allowed to own 25 per cent stakes after three years and 49 per cent after six years. WTO membership will also stop China from suddenly raising tariff barriers unexpectedly, which will reduce some of the risk associated with doing business in China. However, the full implications of the as yet-unpublished 900-page document produced as a result of the negotiations are still being digested. The agreement has yet to be approved by the WTO's ministerial conference in Doha, Qatar from 9 to 13 November. It then has to be ratified by the Chinese government, and comes into force 30 days after China notifies the WTO its has approved it.