I've made a short study on the Chinese telecom market. I'm not sure where this 'foreign domination' comes from. Except for the TD-SCDMA business, much of what China has done is pretty correct. They opened up the market to the likes of Sony-Ericsson, Motorola, Nortel, Cisco, Lucent, Alcatel (now combined together as Alcatel-Lucent) and Siemens, to help develop infrastructure which led to some being the best in the world.
And as the result of this fierce competition, China has produced not one, but two world class telecom equipment companies in the form of Huawei and ZTE, companies that experience massive year to year sales gains and are selling and installing equipment even in the European home turf. The routers and equipment produced by both companies are rightly at the cutting edge with the rest of the world. Huawei is now the world's fastest growing telecom company, and it entered the big five last year. Before the end of the decade it may probably take the 4th spot off Alcatel-Lucent.
The result of the government fumbling on the TD-SCDMA thing is that China from the stand point of infrastructure, is late in adding 3G infrastructure, even though Huawei and ZTE has been busy adding CDMA2000 and HSDPA networks in other countries. Now that the bag is opened, with TD-SCDMA taking a bit of an egg in the face, you got contracts all over for CDMA2000 (aka EV-DO) and HSDPA (aka W-CDMA). Again, Huawei and ZTE took contracts, but there's not lack of it for the foreign companies either.
Its good to read through this website to see how dynamic the telecom and IT markets in China.