Uncommon Wisdom

Dec 22 2008   3:03PM GMT

China to invest $40 billion in 3G network

Tom Nolle Tom Nolle Profile: Tom Nolle

China will likely invest at least $40 billion in a faster 3G network based on China’s own TD-SCDMA, which differs from the international standards. The investment is expected to benefit primarily Chinese manufacturers. This may be an indicator that some major economies will spend to support their own industry rather than simply erect trade barriers or take other overt steps.

The U.S. decision to aid the auto industry would be regarded by some as a subsidy, again showing that countries will tread carefully to avoid poisoning the free trade atmosphere but at the same time support their own manufacturing sector as a necessary part of economic recovery.

Questions on whether Huawei has ties to the Chinese government and the military (particularly the PLA) have swirled for some time and have now been raised again in financial circles, which suggest that the Chinese giant may plan an IPO.

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