The Chinese operations of Alcatel, a global communications solution provider based in France, were faced with strong local competition and a difficult market. It remained unclear how Alcatel would be able to recover growth in the Chinese market. Initiatives were underway to increase focus on services over equipment, to increase Chinese research and development presence, and to merge with U.S. competitor Lucent. May be used with: (9-706-022) China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi; (9-706-023) China: To Float or Not to Float? (C ): Esquel Group and the Chinese Renminbi; (9-706-031) China: To Float or Not To Float? (D): Bank of American's Strategic Investment in China Construction Bank; (9-706-035) China: To Float or Not to Float? (E): ABB Investment in China; (9-706-021) China: To Float or Not to Float? (A).