China Telecom -USA- Corporation Becomes First Chinese Telecommunications Company To Establish Operations in the United States.

Business Editors/High-Tech Writers

WASHINGTON--(BUSINESS WIRE)--Oct. 30, 2002

Company Opens Headquarters in Herndon, Virginia - Unveils

ChinaDirect(TM) Suite of Products for U.S. Corporations

China Telecom, the largest fixed-line telecommunications service provider in China, announced that its subsidiary, China Telecom (USA), will become the first Chinese telecommunications company to establish operations in the United States with the opening of its Washington, D.C. area headquarters on Monday, November 4th.

The Company also unveiled a suite of products called ChinaDirect, offering single-provider, end-to-end telecom services to American corporations doing business in China.

The move comes at a time of unparalleled growth in China's telecommunications market. Commenting on this, China Telecom Vice President Chang Xiaobing, said: "China continues to be a leading investment destination for American companies. They need a telecom partner who has the local experience and know-how to get things done. Last year, China Telecom wired 20 million new residential and business lines to our voice network. That's the equivalent of adding all the phone lines in the State of California in one year. We're used to getting things done in China."

Commenting on the mission of the new company, China Telecom (USA) President Zhang Weihua, said: "The fact that a single company will operate the entire network, from the East Coast of the United States to the easternmost reaches of China, is a big selling point for our new company. American companies are tired of dealing with different time zones, different combinations of service providers, and different excuses. They want one company to put forward a compelling offer, and back it up with an aggressive service level agreement. We are that company. Creating seamless communications links between American headquarters and Chinese subsidiaries is China Telecom USA's only focus, so you can bet we're going to work tirelessly to be good at it."

Mr. Zhang continued: "We are building out a cutting edge network from coast to coast. We have points of presence in Los Angeles, San Francisco, New York and Washington, DC. We're working in the same time zone as our American customers, speaking their language. We'll provide customer service and operations support 24x7."

China Telecom has its own submarine cable circuit connecting the US and China, as well as its transport backbone in the United States. The aim of the new company is to bring its US customers closer to China. The company will offer American customers a suite of three products under the ChinaDirect name:

-- ChinaDirect IPLC: Fully managed Private Line services from the US to all points in China.

-- ChinaDirect IP Access: Direct IP connections to CHINANET, the primary Internet network throughout China.

-- ChinaDirect MPLS VPN: A secure VPN service to help US customers communicate with their China-based operations

Billing will also be simplified and more flexible. "If our customers want to pay us here or in China, it's up to them," Mr. Zhang explained.

In a related development, China Telecom will complete its Initial Public Offering on the New York Stock exchange later in the week.

Media Advisory:

To commemorate its US opening, China Telecom (USA) will hold a reception on Monday, November 4th, at the Mayflower Hotel from 6-8 pm (1127 Connecticut Avenue, NW, Washington, DC). At the event, company executives from China Telecom and China Telecom (USA) will offer more details about their goals and the ChinaDirect suite of products. Following the presentations, there will be limited opportunities for interviews with Chang Xiaobing, Vice President of China Telecom in Beijing and Mr. Zhang Weihua. Interested media should contact Andrew Durant or Phil Overmyer at 202-223-7683 before the event.

About China Telecom (USA)

China Telecom (USA) is the Herndon, Virginia-based subsidiary of China Telecom, China's largest fixed line carrier. China Telecom has 123 million residential and business voice lines, adding 20 million in just the last year; the equivalent of all existing lines in the State of California. It operates China's largest Internet network, with a customer base of 21 million and a growth rate of almost 160 percent. Data customers are growing at a 25 percent rate. In 2001, China Telecom recorded $14 billion in revenues with assets of $51 billion.

China Telecom (USA) was formally established in July 2002 to better meet the growing needs of US companies invested in the China market. In August 2002, the Federal Communications Commission granted it a section 214 license.

China Telecom (USA) offers fully managed Private Line services from the US to all points in China; direct IP connections to CHINANET, the primary internet network throughout China; and a secure VPN service to help US customers communicate with their China-based operations. Unique to the industry, China Telecom (USA) works directly with companies in the US to order and establish telecommunications services for their plants and offices in China. For more information, visit www.chinatelecomusa.com.