China to speed up 5G infrastructure, USD 5 trln awaits to spur ‘intelligent’ elements in rebuilding cities after pseudo biological attack
China Knowledge Online
Mar 07, 2020

Mar 06, 2020 (China Knowledge) - Every imaginary biological warfare has surfaced in Hollywood’s movies; simply by searching the web, such stories are over a hundred in movies and documentary. Though most of the findings of COVID-19 which spread on a large scale are considered by medical experts to be the natural cause of virus abnormal mutation which evolved into a human-to-human spreadable coronavirus. Be it a tragic natural cause or intentionally developed in the laboratory to ‘sabotage’ one country the scale of economic damage is unfathomable, and China has become the first victim in reality.

The enormous economic losses and damages in China brought by the epidemic have spurred the Chinese government to build its defenses against such exogenous shocks be it new forms of the epidemic or other calamities. One consolation from this crisis is the country’s well-developed communication infrastructure which is expected for further upgrading and switching to state-of-art 5G technology.

This has prompted many investors seeking opportunities in China’s A-shares market to relook and review the ‘new infrastructure concept’s stocks’. Just this week alone the A-shares market’s “new infrastructure" concept stocks represented mainly by 5G and cloud computing were on the uptrend. As a barometer of the economy, the performance of the stock market is undoubtedly the projection of economic activities. Earlier this year, China’s central government has intensively deployed or reiterated "new infrastructure" and mentioned relevant content four times. During the first Standing Committee of the National People's Congress last month, seven new areas of the new infrastructure were defined.

There are two rationales supporting the further rise in these stocks’ value. Firstly, China as an emerging economy has not lost its steam to keep building a mega transportation network with a solid structure including airport, high-speed rail and seas terminals. Its pursuit of transforming cities into the intelligent models or ‘smart cities’ has made progress in hi-speed rail transportation, mass rapid transit system, and many other public amenities will move on a fast lane. To make the interconnectivity possible its 5G infrastructure must be in place to support these intertwined services.

As the development of the digital economy and running of ‘smart cities’ are inseparable from the support of 5G, big data, artificial intelligence, cloud computing, and other new technologies, these industries will see trillion dollars investment. A large Chinese population relies on telecommuting and a wide range of online activities to carry livelihood during the long compulsory homestay quarantine.

Second, the "new infrastructure" conforms to the policy guidance and is the key measure to achieve the purpose of stable growth. It is not an entirely new concept, as early as the central economic work conference held in 2018, the positioning of "new infrastructure construction" was defined, including 5G, artificial intelligence (AI), industrial 4.0 and Internet of things IoT). Subsequently, it was listed in the 2019 government white paper. Just days ago, the first Standing Committee of the National People's Congress in 2020, once again, emphasized its importance.

At ministerial level policies are continuously launched to speed up investments in 5G, and accelerate the construction of 5G base stations. Eleven ministries and commissions, including the Ministry of Transport, have jointly issued “the intelligent vehicle innovation and development strategy” to ensure large scale adoption 5G network technology.

Local government relevant efforts to boost the 5G development with 25 provinces reported having drafted into 2020’ work paper; among which 8 regions have clearly planned out the number of 5G base stations to be built this year with figures totaling more than 300,000. Currently, 13 administrative regions, including Beijing, Hebei, Shanxi, and Shanghai have announced a list of key projects with a total investment scale requiring nearly RMB 34 trillion (USD 5 trillion). In addition to traditional infrastructure fields such as transportation and energy, also have accelerated the construction of 5G.

It should be noted that the scope of "new infrastructure" has increasingly widened in China, and its future growth and endeavors will dwell deeper into IoT, AI and many other new technologies towards high-quality economic development. This epidemic, though a great misfortune for China, will boost the country’s 5G infrastructure – the backbone of all emerging industries.

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