Greater cooperation between the telecommunication and finance sectors will be necessary if China is to be competitive in those industries after its entry into the World Trade Organization (WTO), a Chinese government official said at the Digital Economy Summit held in Shenzhen, China, on Thursday.
China’s entry into the WTO would open up the Chinese market to foreign competition, and if local telecommunication carriers and banks intend to keep up with their overseas counterparts, they have to work together to speed up the development of electronic commerce and electronic finance in the country, said Hu Weiyi, deputy secretary-general of the China Institute of Communications, who was speaking at the Shenzhen summit.
“The full utilization of the telecom networks and the financial information networks are key to the development of e-finance and e-commerce, both challenges brought forward by China’s WTO entry,” he said, adding that local telecommunication carriers and banks have to keep up with rapid changes occurring globally.
Telecommunication networks have to find ways to meet the ever-growing needs of the local economy, which include providing more personalized and value-added services, and improving products and service quality, he said. At the same time, it would be important for carriers to use their IT resources and team up with financial institutions to “assist the development of the national economy and improve the competitiveness of enterprise and industry,” he said.
Looking ahead, Hu said Chinese carriers have to change their business models to suit the networked global economy. Traditional business practices and functions must evolve in order to experience significant development in electronic commerce, which is a valuable application which telecommunication providers offer.
“In tackling the challenges posed to the banking industry, we are delighted to see the opportunities that e-commerce brings forward,” Hu said.
According to Hu, mobile technology is breaking the mold of the traditional banking industry. “Banks can provide integrated and total financial applications through secure lines, he said. “The circle of banking services can be enlarged, which promotes greater productivity and an improved income revenue structure.”
Banking in China has seen significant breakthroughs, even before WTO entry, Hu said, adding that more Chinese banks have progressively improved on their online banking systems.
“With WTO entry, the telecom and the finance industries should cooperate in order to flourish,” he said. “Both industries have a good track record of collaboration which can be illustrated from the agreements several banks have signed with telecom companies to provide e-commerce services as well as to provide unified payment settlement services.”