THE pace of reform in China's telecom industry should gather momentum with this week's summit meeting in Seattle between China's President Jiang Zemin and United States' President Bill Clinton. The two men are expected to discuss a range of thorny issues, including market access, copyright piracy, human rights and arms proliferation at the end of the Asia Pacific Economic Co-operation (APEC) meeting in Seattle. Telecommunications is certain to figure as a key trade issue as the leaders meet to discuss ways of improving strained Sino-US ties. The meeting comes in the wake of last week's comments by Huang Ju, mayor of Shanghai, during which he stated his wish for overseas participation in the development of part of the city's telecommunications networks. Mr Huang's statement, at an investment conference in New York, directly contradicted the Ministry of Posts and Telecommunication's (MPT) existing policy, which prevents foreign investment in China's network services market. But Andrew Harrington, vice-president of Asia Pacific Equity Research for Salomon Brothers, said he believed the MPT's policy on foreign investment was now impossible to sustain. ''I think within three months there will be a de-facto change to its policy. ''It is clear now that the pressure [for reform] is overwhelming,'' he said. Cable and Wireless, together with its Hong Kong Telecom subsidiary and AT & T, have been variously tipped as early contenders to assist in running parts of China's emerging telecom infrastructure. Ahead of this week's summit, the US carrier stepped up its lobbying efforts in Washington for the removal of trade restrictions against China. AT & T chairman Bob Allen warned that restrictions on the export of high technology telecom products could cost his company US$500 million (about HK$3.8 billion) in lost revenues from the mainland during the next five years. Bill Marx, who is responsible for AT & T strategy in the Asia Pacific region, said: ''On one hand, we are certainly going to abide by the laws of the US Government, [but], on the other, we have been very aggressive in our negotiating [for change].'' As part of its efforts to break into China's telecom market, AT & T has disclosed plans to build a US$500 million plant to design and manufacture integrated circuits in the town of Wuxi, near Shanghai. Significantly, AT & T wants to transfer state-of-the-art 0.5 micron chip production processes to China. However, the Co-ordinating Committee on Multilateral Export Controls (CoCom) has, until now, prevented the export to China of submicron technology which is used in the latest digital telephone exchange, cellular handsets and high-end computers. Northern Telecom similarity wanted to introduce 0.8 micron technology to its own integrated circuit plant planned for Shanghai, said chief executive Jean Monty in Beijing last month. AT & T is also seeking CoCom approval for the export to China of the country's first Synchronous Digital Hierarchy transmission system. The proposed 622 megabit per second (Mb/s) system involves building a high capacity bi-directional optical fibre ring, linking Hong Kong and Guangzhou. Until this year, CoCom restricted the export to China of fibre-optic transmission systems to 140 Mb/s or less. Peter Howell Davies, deputy chief executive at Hongkong Telecom, said his firm aimed to take an equity position in China's network services market. ''Hongkong Telecom would like to be the preferred partner with the MPT,'' he said. ''We believe we are in a position to be the preferred partner. With the MTP's exceedingly ambitious plans, that the MPT has got, to provide more and more telephone lines, China will require enormous sums of money and expertise. We think there may be some relaxation to achieve these ambitious targets.''