The Spanish arm of Alcatel NV has become the most powerful telecommunications group in China after signing three contracts worth $300m with the Peking government. Madrid-based Alcatel Standard Electrica SA formed a consortium with the Spanish National Institute for Industry to win one of Spain’s most important business coups in China since the latter embarked on its programme of economic reforms in 1978. The contracts were signed in the presence of Spanish President Felipe Gonzalez, and the Chinese Prime Minister, Li Peng. President of Alcatel Standard Electrica, Miguel Canalejo, said at the time, China is our leading export market. The Chinese will install 4m new phone lines in 1993 – 2m home-produced and 2m from abroad. Of the latter 2m, 500,000 will be ours. While all of Alcatel’s European subsidiaries compete for business among themselves, the Spanish subsidiary had benefitted from good political relations between Spain and China, he said. In contrast, Alcatel France was having problems after a showdown that involved France selling Mirage fighter aircraft to Taiwan. This ended in the closure of the French Consulate in Canton, and a freeze on contracts to French companies – and the company’s ultimate ownership does not seem to have got through to the Chinese. But it won’t be an easy ride for Alcatel, because of China’s on-going decentralisation – according to the La Vanguardia newspaper, the responsibility for payments and agreements are being transferred from Peking, which always paid immediately, to local corporations and regional administrations, which is causing great confusion.
