An Econometric Model of the Telecommunication and Economic Development in China

Abstract

In the information-oriented modern society, the economic activities are closely related with the telecommunication and information activities. The data to be informed and the media to exchange the information both have been increased. The experience in the developing countries suggests that the telecommunication development is a key to the economic development. The purpose of this study is to analyse the impacts of the telecommunication development on the economic growth in China in order to propose the plan for the development of the telecommunication sectors. We will specify an econometric model for the economic development in China. The simulation results have shown that China is breaking into a new age of the economic system, and the demand for telecommunication services will increase greatly. Especially, the increase in the demand will be at its peak from now on to the year of 2000, and the telegraph services will be replaced by other telecommunication media. In order to improve the development of the gross economy, the investments to the telecommunication sectors, which includes those into the telecommunication equipment and network facilities, have to be planned and controlled suitably. Since the speed of the development of commerce, transportation and telecommunication sectors are all faster than the speed of the gross economy, it is also necessary to take account of the changes in the industrial structure.