According to its commitment to the WTO, China has further opened its policy to the foreign telecom industry.

It has now allowed foreign investors to increase their stake in joint venture telecom companies with a local firm from the previous 33% to 49% from December 12, 2006.

China pledged upon its entry into the WTO that it would cancel the limit on foreign invested telecom service in China around 2007 and have foreign investors hold a maximum of 49% of stake in their joint venture with Chinese firms.

At present, Chinese telecom operators, including China Mobile, China Unicom, China Netcom and China Telecom each have foreign investors. These foreign investors include Vodafone, SK, Telefonica and Commonwealth Bank of Australia.

So far, Telefonica, the second largest shareholder of China Netcom, has increased its stake in China Netcom from 4.97% to 5%.