This paper analyzes why no foreign direct investment (FDI) has entered basic telecom services in China despite relaxed government policies after the World Trade Organization (WTO) accession in 2001. A new indicator of barriers to FDI incorporating the policy and non-policy impediments has been developed with multiple sources of data including a first-hand survey and interview. Analytic hierarchy process has been applied to reduce arbitrariness in assigning weight to each impeding factor. Results indicate that there is no significant reduction in the actual level of openness to FDI in the sector over the past decade of post-WTO period, which is largely attributable to the recessive non-policy factors. Policy implications are discussed.
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