'Rapid progress' made in negotiations with 40 foreign firms

China Unicom claims it has made rapid progress in negotiations with more than 40 foreign firms who invested with it in joint-venture contracts that Beijing later said were illegal, and it hopes to sign agreements with all of the firms by the end of the year.

The firms, barred from direct involvement in telecommunications services, put about US$1.4 billion in more than 40 so-called China-China-Foreign (CCF) ventures with mainland partners that then set up joint ventures with Unicom and made money through installation and consultation fees.

Last year the government ruled CCF contracts were 'improper' and must be wound up, leading to months of difficult negotiations with the foreign parties who demanded a return on their investment.

Yu Xiaomeng, a deputy director of China Unicom, said that recently negotiations had gone rapidly.

'We have signed agreements with many companies, including US ones. Things are going well. We can solve the issue quickly. We hope to complete this by the end of the year,' he said.

Asked whether this was equivalent to compensation, he said: 'We do not call it compensation but their reasonable rights. We give them a reasonable level of reward, in the form of cash.' He was speaking at an international conference on CDMA at the China World Hotel in Beijing.