Interview
China’s New Infrastructure
- New infrastructure investment is projected to reach approximately $2.1 trillion between 2020 and 2025, growing at an annual rate of around nine percent.
- Excluding ultra-high voltage and railway systems to focus strictly on digital content, investment is expected to total around $1.3 trillion with a growth rate of 17 percent per annum over the next five years.
- The deployment of 5G networks in China is estimated to require approximately 5 million macro base stations, representing 1.3 times the scale of 4G deployments, with total investment projected at $153 billion from 2019 to 2025.
- Satellite internet is planned to provide complementary connectivity to ground-based 5G stations, specifically targeting harsh environments such as deserts and the open sea.
- The Ministry of Information and Technology set a 2020 target for 300,000 industrial enterprises to transition to cloud-based operations, implying a 10 percent penetration rate for industrial IoT.
- Industrial IoT penetration is forecast to grow by approximately 45 percent within five years based on a 33 percent public cloud market projection.
- State-owned enterprises are increasingly shifting toward digitalized investment in grids and energy data centers through collaboration with internet companies.
- China is expected to achieve one of the highest densities of high-speed rail and urban transit systems by 2025, supported by government timetables to integrate the railway system with cloud and big data.
- The shift from offline to online solutions in sectors like smart education, medicine, and logistics is anticipated to accelerate due to COVID-19 constraints and pre-existing structural trends.
- The real economy is expected to begin benefiting from manufacturing industry scale and complex supply chains after approximately 2023.
- If industrial IoT penetration reaches 45 percent by 2025, the manufacturing sector could realize $700 billion in cost savings, representing 25 percent of 2019 manufacturing capacity.
- Electronics, power, machinery, and energy are identified as the primary end markets with the largest potential for cost savings.
- New infrastructure investment is expected to generate more than 200,000 engineering jobs annually and foster new business models and formats.