The year 2000 brought new changes in telecommunications regulations. Designed to clarify some vague definitions, the rules were welcomed by telecom operators. Foreign companies showed interest even though no specifics were included for their involvement. The basic tenet of the rules was to allow the telecoms to focus on upgrading services rather than to continue to engage in price wars.

This meant that China Telecom could forge ahead with more plans to upgrade services and engage in technical progress as well. In October of that year they teamed with Hutchinson Global Crossing, a Hong Kong-based network operator to create the Shenzhen-Hong Kong fiber-optic transmission system (SDH). The SDH extended China Telecom's fiber-optics offerings to a total of 80 kilometers from Guangzhou to the border of Hong Kong, and made a direct connection to the system found there.